Outsourcing to India: National Security Subversion & Job Loss

By Gene Quinn
January 5, 2011

On July 23, 2008, the United States Patent & Trademark Office published an interesting notice in the Federal Register reminding patent attorneys and patent agents that there appears to be widespread and open violations of the Export Administration Regulations within the industry. Shortly after the aforementioned Federal Register Notice was published I wrote, rather naively in hindsight, that this announcement “should signal an end to the $2.2 billion per year patent outsourcing to India.”  See USPTO Ends Patent Outsourcing to India.

Obviously, that hasn’t happened. It seems more and more patent outsourcing is occurring, despite the fact that it is against the law, which seems to bother no one; that is no one other than those in the industry that are losing their jobs to the shoddy work provided by outsourcing companies in India. But what of the ethical concerns? What about the conflict of interest nightmares that India presents? What about the lack of respect for intellectual property rights? Everything seems to be fine and dandy, and likely will remain so right up until things are neither fine nor dandy, but by then it will be too late.

Let’s start with the explanation of the inappropriate behavior as explained by the USPTO back in July of 2008.  The Federal Register Notice explained, in part:

Applicants who are considering exporting subject matter abroad for the preparation of patent applications to be filed in the United States should contact the Bureau of Industry and Security (BIS) at the Department of Commerce for the appropriate clearances. See MPEP § 140 (8th ed., Rev. 5, Aug. 2006). The BIS has promulgated the Export Administration Regulations (EAR) governing exports of dual-use commodities, software, and technology, including technical data, which are codified at 15 CFR Parts 730–774. Furthermore, if the invention was made in the United States, technical data in the form of a patent application, or in any form, can only be exported for purposes related to the preparation, filing or possible filing and prosecution of a foreign patent application, after compliance with the EAR or following the appropriate USPTO foreign filing license procedure. See 37 CFR 5.11(c). A foreign filing license from the USPTO does not authorize the exporting of subject matter abroad for the preparation of patent applications to be filed in the United States.

The fact that the outsourcing of patent searches and the preparation of patent applications violates U.S. law only makes perfect sense, particularly when you factor into consideration the requirements of 35 U.S.C. 181 (re: national security) and 35 U.S.C. 184 (re: foreign filing licenses).  Pursuant to Section 181, inventions in which the federal government has a property interest are the subject of a secrecy order upon the request of a the head of the interested Government agency.  If the invention is not one in which the federal government has a property interest the invention can still be subject to a secrecy order if the Atomic Energy Commission, the Secretary of Defense or the head of another defense agency determines the publication or disclosure of the invention would be detrimental to national security.  By openly and willingly tolerating the outsourcing of preparation work of patent applications the clear intention of 35 U.S.C. 181 is subverted.  What good does a secrecy order make if the the information relative to the invention has already been sent overseas?  The old saying about the cat being out of the bag comes to mind.  In fact, once the information is sent to India, or any other place around the globe, review for national security purposes seems almost comical.  The secret, if there needed to be one, is already out.  Talk about closing the barn door after the horse has left the building.

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But surely those in India have a vested interested to keep information secret, right?  Surely there are confidentiality agreements in place?  First, no implied or overt secrecy agreement trumps the requirements of federal laws and regulations.  Second, do you really believe that those in India are concerned with U.S. intellectual property laws?  Workers move from company to company to company all within a span of months and all because they can earn an extra dollar an hour somewhere else.  Are they segregated from working on issues where they have worked for competitors previously?  Of course not.

Recently I had an occasion to need to send a DMCA takedown notice to a blog that simply cut and pasted one of my articles and published it as their own.  This blog was operated by ADHIKARI IPC, which is an Indian company that claims to provide a comprehensive range of intellectual property services, or in other words they are an India outsourcing outfit.  These people didn’t care enough about my intellectual property.  They ripped me off and passed of my work as their own.  They even had the audacity to respond to me telling me they didn’t appreciate my characterization in the DMCA takedown notice of what they did as “willful and deliberate,” which of course it was.  They claimed it was done “purely by oversight.”  How is a cut and paste job purely by oversight?

It was easy enough to get these copyright infringers to remove the infringing material with a DMCA takedown notice, and as of today it seems that their entire blog is closed down on blogspot.  I subsequently learned that much, if not most, of what they were publishing was cut and paste infringements of the writings of others.  If they care so little about the intellectual property of others why in the world would you look to them to provide intellectual property services?  Talk about giving the fox the keys to the hen house!  Lack of respect of intellectual property rights seems widespread in India.  So not only does outsourcing violate the Export Administration Regulations, not only does it circumvent 35 U.S.C. 181, but there is no culture of respect of rights.

We learn ever more frequently about U.S. companies providing intellectual property to companies overseas, partners at first, who then take the information and wind up competing on the global market against the creator of the intellectual property.  Can you imagine the shareholder lawsuits for failure to adequately manage a company when it is learned that the leaders of these major tech companies knew or should have known they were handing over the keys to the kingdom to those in India who stole those keys and competed globally against the innovator company?  The loss of rights, particularly trade secrets, is potentially the great unknown in terms of the damage possible as a result of outsourcing.

Look, it is impossible to ignore that many large tech companies are outsourcing patent work to firms outside the United States.  Indeed, many large tech companies are outsourcing a lot of technology work to India and elsewhere.  In fact, so widespread is the generic outsourcing problem that in April of 2010, Robert Reich, a Professor of Public Policy at the University of California at Berkeley and former Secretary of Labor under President Clinton, wrote an article in the Wall Street Journal describing a bleak picture of the U.S. economy.  Reich blamed outsourcing in large part for the loss of American jobs, and said that even with robust job growth of 300,000 jobs per month it would take between 5 to 8 years to return to pre-recession levels of employment.  He concluded that “those who have lost their jobs to foreign outsourcing or labor-replacing technologies are unlikely ever to get them back. And they have little hope of finding new jobs that pay as well.”

Outsourcing is a huge problem, and there are numerous high paying technology based jobs and patent preparation work that could be done here in the United States, and which is actually legally required to be done here in the United States, yet government officials look the other way as these jobs are exported to India and other parts around the globe.

Perhaps the biggest problem for those who outsource their patent work to India isn’t that they are violating the Export laws and rules, or that they are subverting 35 U.S.C. 181, but rather the ethical concerns that simply cannot be ignored.  These ethical concerns are, in fact, inherent in the decision to outsource.  After all, if there are any ethical concerns it is the U.S. lawyers that are enabling the outsourcing that will be crucified once the things start to hit the fan, which they will.

For example, potential conflicts of interest can be waived by the client if they are fully disclosed.  On the other hand, actual conflicts of interest cannot be waived even if fully disclosed and understood by the client.  How does anyone even know if there is a conflict of interest when the work is being done in India?  These outsourcing shops do work for whoever sends work, and those in the industry know that they are working on applications today for company A and tomorrow for company B who is a competitor of A.  These applications deal with the same or similar products, and are far too close to allow any U.S. attorney to engage in the employment of both A and B because of actual conflicts.  Even if the situation only presents a potential conflict, are these Indian companies disclosing that information fully and fairly and getting both A and B to sign off?  Of course not!  What about when the potential conflict matures to an actual conflict, do they stop representing both A and B?  Of course not!  The U.S. attorneys involved who are actually filing the cases at the USPTO are going to wind up being the ones taking the fall eventually because we know that the Office of Enrollment and Discipline always goes after the low hanging fruit; namely those they have easy jurisdiction over.  You know what they say about things rolling down hill, right?

But how is all of this going to come to a head?  Any number of ways really, but it will be in litigation related one form or another.  When you want to take the deposition of the person (or people) in India who were engaged in the drafting of the application things will get interesting.  First, how do you intend to find that person?  No one knows who is responsible for any particular application.  So when one party could have the information and cannot produce it due to faulty record keeping aren’t all inferences drawn against the party who can’t produce the information?

What, attorney-client-privilege did you say?  Get real!  Has any attorney-client-privilege been established let alone maintained with India?  If communications are made with those who are not party to the privilege then there is no privilege.  If these India companies don’t segregate out those working for competitors and they talk amongst themselves it seems like a good argument that any privilege that could have applied was long since waived.  But how could a privilege ever attach when there is a non-attorney engaged in the drafting and provision of legal advice and services? Whether any of this is ultimately the case, can you imagine the discovery that a district court judge might allow down this path?  This is going to be like tugging at a thread — everything will come unwound.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 111 Comments comments.

  1. S January 6, 2011 12:06 am

    If it is illegal to outsource patent prosecution work, why is the practice so rampant?

    ” Even if the situation only presents a potential conflict, are these Indian companies disclosing that information fully and fairly and getting both A and B to sign off? Of course not!” – This just appears to be a conclusion out of paranoia. I am aware of Indian IP outfits that do conflict checks. Also, isn’t it in the interest of the outsourcer to ensure that no conflicts exist.

    For e.g if you are buying perishables, would you not check if the shop storing it took enough precautions to keep the perishables disease free, germ free etc? I’d assume you’ll buy the item only if you are completely satisfied with what you are getting. If I am the buyer, I’d not buy if I am not completely satisfied.

    The legalities are unclear to me but, there is a proven benefit in the business model of outsourcing. The tech outsourcing has evolved into a sophisticated, transparent business. It is hugely successful as well. Btw, tech outsourcing has helped create jobs in the origin countries.

    Patent outsourcing is in its infancy compared to tech outsourcing. Some people have fears and are paranoid about how it is going to turn out bad. Some people are optimistic about the whole thing and want to work towards ironing out the issues and make it a successful. May be, some aspects of the ip work will be off the table.

    Only time (and probably law changes) will tell how the nascent ip outsourcing will work out.

  2. Singh January 6, 2011 7:42 am

    Gene….. I am second to your thoughts and also admit that “outsourcing will create US more jobless”.

    However, the way you mentioned India saying – “Lack of respect of intellectual property rights seems widespread in India” etc etc. is not right.

    Just because some Indian company stole your text doesn’t mean that all other IP companies in India lack respect towards IP. Is this never happen’d in U.S.?

    Moreover, you can’t question the knowledge and technical base of Indians ……..infact any country…..

    Not to forget that you have very good number of Indian Examiner’s sitting in USPTO and examining the patent applications.

    Regarding outsourcing, I would say “you go to your favorite shop again and again coz’ you get better quality, quantity and service”. 🙂

  3. MBT January 6, 2011 10:35 am

    Good article, Gene. Unfortunately, the enforcement authorities don’t have the budget to go after perpetrators and there is likely not going to be public outcry to save the jobs of patent practitioners. The national security and industrial espionage aspects of the problem won’t bubble to the top above terror plots from Yemen and TSA screening proceedures. Some self-policing, such as verifying the source of the work product provided by vendors or contract work done by other law firms will likely go much further than any federal enforcement efforts. Domestic practitioners not doing business with those who either can’t verify a domestic work product or are clearly outsourcing their work will give the outsourcing businesses a financial hit. Good job for keeping this subject in the forefront!

  4. Gene Quinn January 6, 2011 10:44 am

    S-

    You ask: “If it is illegal to outsource patent prosecution work, why is the practice so rampant?”

    Because there is no enforcement of the laws. Same goes for unauthorized practice of law. It happens all the time because the Patent Office does not enforce the rules. When there is a rule that doesn’t get enforced that encourages activity, but the underlying reality remains that the practice is against the law.

    -Gene

  5. Gene Quinn January 6, 2011 10:48 am

    Singh-

    Please address the fact that people in companies in India move from company to company to company all within a span of a few months. Please also explain what precautions are put in place to make sure these people do not share trade secret information they learned while in the employ of another company. Please also explain what conflict checks are done, how often work is refused because work has already been done for a competitor.

    I could go on and on. ALL of this relates to lack of respect to IP. Ethics, conflict checks, safe guarding of trade secrets, segregating workers who have acquired secret information and much more is all required and the lack of any piece demonstrates an acute indifference to the underlying intellectual property rights of others. So yes, it was just one company in India that engaged in cut and paste copyright infringement, but as far as I can tell pretty much all India outsourcing companies lack basic respect for IP as demonstrated by the lack of controls, the poor quality of the work and the indifference to conflicts of interest.

  6. MBT January 6, 2011 10:49 am

    Singh, nobody is questioning whether there are intelligent, capable people in India that can do the work. There clearly are – if all the work product coming out of India was inferior, the practice would dry up quickly. However, when an activity is illegal and unregulated, the Indian vendor might not necessarily be using the intelligent capable people to do the job. Also, intelligent capable people are perfectly capable of engaging in espionage as well. Again, not everyone would, but the potential is too great to take the chance.

  7. Gene Quinn January 6, 2011 10:51 am

    MBT-

    Thanks. I agree this stuff doesn’t rise to a high enough level. Eventually what will happen is OED will go after some attorney for facilitating this practice, or perhaps some State AG will make it an issue to create jobs and will go after a law firm or lawyers. The thread is probably more likely to get pulled in litigation though. I suspect it is only a matter of time before patent litigators dive into the seedy aspects of outsourcing to India and blow the lid off of what is going on.

    -Gene

  8. MBT January 6, 2011 11:06 am

    Gene, I agree. Litigation is the means to many aspects of regulatory functions in this country. However, it has not proved to be the solution to other outsourcing issues in the past. Rules of Professional conduct violations should at the least get the state bars involved, if nothing else.

  9. Bob Lelkes January 6, 2011 11:12 am

    Thank you Gene for drawing attention to this trend, which has expanded far more than I was aware.

    Not only is outsourcing of patent application drafting legally and ethically questionable, I consider it shortsighted. In my experience, drafting patent applications is one of the best ways to develop a working relationship with a client. When else does one get to work as intimately with a client’s best innovators as when drafting patent applications? How will someone in India interact with the inventors and the client to learn more about the technology and its context within the client’s business model? Two centuries ago, B. Franklin warned us not to be “penny wise, pound foolish”.

    Those who consider writing a patent application not worth their effort are missing out on one of the most creative aspects of working as a patent practitioner. Writing patent applications is far more satisfying than fixing a mess left by someone else. Why should hirees in India have all the fun?

    Are we really doing everything we can to be cost effective before we turn to outsourcing? A substantial number U.S. PCT applications enter the respective national phases with claims that must be amended to reduce excess claims fees. Usually nothing is done to address novelty-destroying state of the art until the application is examined on the merits, which raises prosecution costs and frequently leads to expensive divisional applications due to lack of unity. Many are abandoned shortly after having invested considerable sums in nonrefundable official fees. Jumbo patent applications cost a mint to translate.

    For those who file internationally, a greater understanding of the impact of domestic decisions on the cost of patenting outside the U.S. opens opportunities for substantial savings due to the international multiplying effect. BF: A stitch in time saves nine.

    For those pursuing protection solely in the U.S., it is no mystery that a well researched and carefully crafted patent application will often pay for itself in reduced patent prosecution cost and, more importantly, a reduced risk that the granted patent will be successfully challenged. Attorneys and agents who have seen first-hand what can go wrong with a patent application during patent prosecution, and what can happen post-grant during reexamination and enforcement, are in a better position than someone who’s sole patent experience is drafting patent applications to (a) write effective, robust patent applications directed to the invention’s value proposition and (b) explain the benefits of doing so . Where do we find such all rounders? You guessed it.

  10. Nilanshu Shekhar January 6, 2011 4:47 pm

    Dear Gene,

    To start with, the fact is that the total patent research market is not USD 2.2 billion rather the estimate was for the total LPO market. Patent research for that matter only adds up to USD 50-70 million. I hope you will agree that Legal Process Outsourcing is somehow different from patent research.

    I understand that you must be infuriated due to some unethical behavior of a firm. However, since this matter is very sensitive with respect to science and cooperation therefore it would be appreciated if the facts are whetted before a public posting.

    Further, it was surprising to read about your comment on the attorneys who outsource such work are actually violating the law. I would like to mention that, be it India, US or for that matter anywhere in the world the love and respect for ones country always takes precedence over any other gain.

    Therefore, I would like to ask that those who are outsourcing patent research are outlaws???

    The answer to this would in majority be a big NO, because as a director of a patent research firm I have come across many instances where several patent attorneys have formally or informally mentioned their inability to outsource some issues due to the export control regulations. All other issues, except those under the purview of that regulation have been outsourced from time to time. Thus, it would be unjust to simply brand those esteemed individuals at law breakers.

    Rather, they are professionals trying to optimize their resources towards ensuring betterment for their clientele.

    Patent research in totality comprises many sub-segments, and using services for litigation, asset management, licensing, investment/collaboration etc. is the need of present day fast moving market scenario.

    Mutual cooperation is the only way to remain competitive in this global economy towards the betterment of science and technology, but only without compromising with the law of land.

    On the issue of attrition, I would like to add that this has been a problem all over the world and sadly you cant deny this to be a problem in the US as well.

    Leave the issue of a patent analyst there have been cases where a patent attorney having the entire responsibility of an organization shifts to some other company. This does not mean a doom for a particular technology/company. I would like to emphasize the importance of corporate as well as individual ethics and I can safely say that more than 85% of the people involved in the patent research industry follow ethical guidelines religiously and professionally. For the remaining 15% I am afraid we all are helpless, as it is not possible to erase the human brain like a hard drive (the procedure shown in the movie ‘Eternal sunshine of the spotless mind’ can hardly be a reality).

    Ahead, I totally agree with your actions against those individuals/firms which are not respecting intellectual property in any industry, irrespective of political jurisdictions. There have always been steps to bring such cases in the light of law and your initiative to raise such issues on a public forum is highly appreciated.

    It is our collective responsibility to develop the culture of respecting Intellectual Property Rights; irrespective of any country restrictions.

    Regards,
    Nilanshu

  11. Stan E. Delo January 6, 2011 5:18 pm

    Gene-

    Interesting article that points to an issue that definitely deserves the light of day to be shone upon it.

    MBT writes in part: “Unfortunately, the enforcement authorities don’t have the budget to go after perpetrators and there is likely not going to be public outcry to save the jobs of patent practitioners. The national security and industrial espionage aspects of the problem won’t bubble to the top above terror plots from Yemen and TSA screening procedures.”

    I am reminded of some patents that I found during an extensive patent search, that the US military took assignment to, basically putting them on hold until it became clear that they would not jeopardize the national security of the US. As I seem to recall, when finally released, the applications would start anew, so the inventors could get their full patent term? One interesting example was a patent application for new ways to manufacture inflatable boats that was filed near the beginning of WWII, producing segmented chambers much like the Zodiacs of today. The military did not want to let the Axis powers have access to this new technology, which is a bit sad in a way, but the invention Did save who knows how many thousands of lives for the allied powers.

    I certainly wouldn’t want to be the US attorney involved when the Pentagon came knocking about an application that they had *outsourced* abroad for a new way to produce even smaller thermonuclear devices, for instance, especially if it became apparent that the Genie had been let out of the bottle by a foreign firm that had no clear way to ensure ethical and confidential behavior. Even if they were ethical and aboveboard, there would be absolutely no way to discover that, because of course they are not bound by US laws. Maybe when a few US patent attorneys go to Federal prison for a few years, it might just garner a few well deserved headlines.

    Stan~

  12. Ashwin January 6, 2011 5:35 pm

    Great article Gene bringing much needed attention to this horrible trend. Outsourcing patent work is a dangerous idea and a trend. First of all, the quality is horrible. The quality of English is horrible. Not to mention that it is prima facie unauthorized practice of law and other ethical issues that you have mentioned.

    All patent practitioners need to alter their local state attorney generals of firms and attorneys that are participating in this. When a few attorneys find themselves disbarred and in prison, people will get the idea. However, as you said, none of these Indian drafted patents will ever stand up in litigation. Litigation will blow this fiasco wide open. Until then, we should require state attorney generals to enforce ethical obligations to the fullest. There is a reason we go to law school here, take the state bars and the Patent Bar. There is a reason for all these exams – to maintain the highest level of quality, confidentiality and ethics. This cannot be subverted especially by clowns such as Adhikari and other outsourcing chop shops.

    Keep up the good work Gene.

  13. Gene Quinn January 6, 2011 6:59 pm

    Nilanshu-

    I understand that you have a vested interest in the outsourcing to India being legal and appropriate, but the facts just don’t support your position.

    First, with respect to the entirety of the market, you miss the point that the sending of ANY technical information can be an export violating the EAR. Even the sending of an e-mail can violate the rules. Furthermore, the fact that the industry may be small (even if I were to agree to that) doesn’t have any relevance with respect to violating the law. So at best you have a violation of law that affects less market share, but a violation nevertheless.

    You also ask whether those US attorneys who facility patent outsourcing are outlaws and then answer the question yourself in the negative. Of course, that is not correct. Those who send technical information abroad without appropriate permissions are violating the law, it really is that simple. On top of that, the ethical and conflict issues will wind up squarely on their shoulders. That is just the way that the US ethics panels operate. They won’t be able to punish Indian companies, but they will be able to punish US lawyers, and eventually they will.

    You also say that the attrition problem occurs in the US and you want me to admit that. You are, of course, wrong there as well as I am sure you know. People in the US do not work for a company, after company, after company, after company all within a span of months. When people move there are also careful screening mechanisms. In the US a worker simply does not work for 3 or 4 companies as an employee over the span of months. You can pretend, but we both know the reality.

    Whether 85% of companies in India follow ethical guidelines religiously, as you claim (which I dispute) isn’t the core issue. Even if there is 100% of companies following ethical guidelines religiously that doesn’t change the reality that the transmission of technical information abroad without proper permissions violates Export rules and laws and directly subverts 35 USC 181.

    I harbor no ill will against you, but you are just on the losing side of this debate both based on the law and the facts. Your only saving grace is that US authorities have so far not seen fit to put an end to this practice. Eventually some patent litigator will blow the lid off of this outsourcing and it will be ugly and extremely costly for a company caught in the crosshairs.

  14. Rohan January 6, 2011 7:02 pm

    What about inventions made in India for US companies? You do realize that India is the source of a lot of innovation.

  15. Rohan January 6, 2011 7:20 pm

    MPEP 140 states:
    “In the interests of national security, the United States government imposes restrictions on the export of technical information. These restrictions are administered by the Departments of Commerce, State, and/or Energy depending on the subject matter involved. For the filing of patent applications in foreign countries, the authority for export control has been delegated to the Commissioner for Patents >Note that the export of subject matter abroad for purposes not related to foreign filing of a patent application, such as preparing an application in a foreign country for subsequent filing in the USPTO is not covered by any license from the USPTO. Applicants are directed to the Bureau of Industry of Security at the Department of Commerce for the appropriate clearances”

    What this tells me is that if the EARs are satisfied, you may send technical data abroad for purposes not related to foreign filing. Did you read this before you wrote the article?

  16. Gene Quinn January 6, 2011 7:20 pm

    What about inventions made in India. You do realize that export laws in the US apply to the US, correct? Your statement about innovations in India really misses the point. I dint say or suggest there is no innovation in India. I just point out that sending technical information to India without permission violates the law. That is reality whether you believe it or not.

  17. Rohan January 6, 2011 7:24 pm

    My comment about inventions made in India do not miss the point.

    37 CFR 5.11 states,
    e) No license pursuant to paragraph (a) of this section is required: (1) If the invention was not made in the United States

  18. Gene Quinn January 6, 2011 7:28 pm

    Rohan-

    Yes, I am aware of that and that changes nothing. I guess you are not that familiar with the issues or you didn’t read the article, or perhaps you didn’t understand what you read.

    Those sending information outside the US need permission. Without permission it is a violation of export laws. Exactly which part is confusing to you? You do realize the analysis required is extremely complicated and people don’t go through the analysis and they don’t apply for a license when the legally need a license.

    Also, this doesn’t apply to whether it is safe to use India. Neither does it relate to whether it is ethical or whether there are conflicts of interest.

    I suggest you actually read the article.

  19. Rohan January 6, 2011 7:29 pm

    Gene, so what you are saying then can be summed up as “If you are permitted to export the technical data under export control laws, you are not doing anything illegal”

    If this is true, why the rather sensationalist and borderline offensive article for something that can be easily handled legally?

  20. Rohan January 6, 2011 7:31 pm

    Obtaining permission for information not classified as 64-bit encryption, atomic technologies or laser guns is straightforward. I don’t understand why you are so mad.

  21. Gene Quinn January 6, 2011 7:35 pm

    Rohan-

    I apologize if the truth offended you. Of course, there is nothing offensive here just the facts and truth.

    The fact is that the law is not followed. That is the reality whether you choose to believe it or accept it. Why is it so troubling to you that I point out ethical issues, conflict issues, trade secret issues and clear and ongoing violations of US law?

  22. Gene Quinn January 6, 2011 7:38 pm

    Rohan-

    Thinking it is easy to navigate export rules demonstrates you don’t know what you are talking about. Why not cite you legal support? I’m sure it is because you are incorrect.

    Permission is needed for many things that don’t seem to have any military or security implications.

    In the future I suggest you inform yourself about the topics you comment on. The export rules are anything but easy to navigate.

  23. Bobby January 6, 2011 7:41 pm

    Gene,
    I do have to question what portion of patents would legitimately be a concern to national security. If Lockheed Martin is outsourcing the work, that is a big problem and should be dealt with immediately, but if those outside of the US manage to get information on Smucker’s spreader apparatus before the US public does, it’s not going raise the terror alert level (FYI, we are at yellow now). I’m not saying this isn’t a concern, mind you, but that you might be blowing that particular element way out of proportion.

  24. Gene Quinn January 6, 2011 7:45 pm

    Bobby-

    The question is whether we follow the law or not, and by not following the law jobs are lost during a recession.

    Pretty much all the major companies outsource to India. There are all kinds of communication technologies outsourced.

  25. Rohan January 6, 2011 7:49 pm

    Its actually rather easy. Here is a 7 page set of guidelines:

    http://www.access.gpo.gov/bis/ear/pdf/738.pdf

  26. Rohan January 6, 2011 7:55 pm

    I cannot comprehend your insult “Thinking it is easy to navigate export rules demonstrates you don’t know what you are talking about. Why not cite you legal support? I’m sure it is because you are incorrect. ”

    cite me legal support? Me will look

  27. Bobby January 6, 2011 8:05 pm

    Job loss was a big focus of this article, but even the title said ‘National Security Subversion.’ If there are cases where there are legitimate threats to national security, then that is a serious concern. If it’s at worst a failure to play security theater, then the national security element is not really that significant.

  28. Blind Dogma January 6, 2011 8:27 pm

    Bobby,

    Why am I not surprised to see you picking yet another position where you disregard what the law actually is?

    I can only imagine that Gene has not banned you because your posts are so obviously wrong that you cannot possibly lead anyone astray.

    I am curious as to what possible purpose can you have in displaying your selective desire to apply law where you think it makes sense, and in situations you clearly do not understand?

  29. Bobby January 6, 2011 8:45 pm

    @BD
    I am not contesting that such behavior is illegal. I am questioning the harm such behavior typically plays. Something can be illegal and not harmful, and there are all kinds of goofy statutes that are still part of the law but never enforced. I readily acknowledge that there could be certain cases where there is a real threat to national security and those should be treated seriously, but I doubt the revelation of a better mousetrap to an Indian firm is going to result in a threat to public safety in the US, save perhaps the wrath of an unemployed patent attorney.

  30. Ashwin January 6, 2011 9:16 pm

    The question is not whether there is public harm. If I do drugs in my bedroom, I am not harming anybody but myself. But doing drugs is still illegal because it has wider social implications. This is what Gene is trying to establish when it comes to outsourcing patent work, something you have not been able to wrap your head around. If something is illegal, it is illegal. You cannot pick and choose the situation to which you are going to apply the law. What Gene has not touched upon, and what should be brought to everybody’s attention is the unauthorized practice of law part of the issue. Practice of law requires “direct supervision” of what is being done. This is why law firms have the partner – associate – paralegal hierarchy.

    Typically, these Indian patent chop shops are doing utility patents for between $2000 and $3500 and the US attorney is just putting his signature and registration number to the application. This is, without a doubt, a fraud on the USPTO, unauthorized practice of law etc. – especially when it’s fairly common practice for the US patent practitioner to barely look at the application for about 20 minutes before filing.

    In any case, as we all know there is no value in a patent just being filed or granted. What really matter is enforceability. Any patent litigator worth 2 dimes will destroy a patent being drafted by these chop shops, thus destroying any value these shops can provide. From my own experience, the quality is atrocious, the use of the English language is scary, and the results will play themselves out in the court room in the ED Texas soon enough (I hope).

    To the people who have a vested interest in outsourcing, I understand that you are biased about this issue, but illegal is illegal. It does not matter if it is drugs, or illegal patent drafting outsourcing. In any case, I think this is a non-issue as most tech companies will realize that if they want a patent to stand up in court, they cannot outsource. And what Gene says is true – these chop shops have an atrocious retention rate. People stay for 1-2 months max and move around.

    Finally, all patent attorneys and agents in the US should alert their state attorney generals as well as their State Bar Ethics Committees immediately. If anybody is interested, they can email me and I have a list of all illegal outsourcing companies (there are literally hundreds being churned out in India now) engaging in unauthorized practice of law. One way or another, we must put an end to this practice – either through the state bar, attorney general or the court room.

  31. Gene Quinn January 6, 2011 9:28 pm

    Bobby-

    In terms of subversion, do you not understand the the entire reason we have sec. 181 is to make sure sensitive information is not released? If the information is already released then 181 is superfluous.

    I don’t have to prove there is harm, it is still against the law. The law is set up to require permission and review before the fact to make sure there will not be harm. Outsourcing undermines the safety checks.

    Can you please elaborate with respect to what is confusing you?

  32. Rohan January 6, 2011 9:42 pm

    Ashwin,

    Your response was poignant and well-researched. I want to thank you for bringing attention to the REAL issue with outsourcing. I actually agreed with Gene for the most part but for his blatant India bashing and rather sensational claim of rampant criminal conspiracies. A picture of India juxtaposed to “National Security Subversion”–Wow, what kind of message is that.

    I agree with you that we should rid the earth of these “chop shops” and keep the US patent attorney honest.

    I do have a question. Is the “unauthorized practice of law” issue rest solely on “direct supervision” and the lack thereof?

    I do not see national security being an issue. I also do not see export controls really being issue. I agree that it is complicated at first, but it is not as confusing as it looks. As far as conflicts, I agree with Gene.

  33. Rohan January 6, 2011 10:02 pm

    One clarification

    When i said “I do not see national security being an issue”. I should have said that having a patent application that runs into sec. 181 issues is rare. I cannot imagine that such a patent application would have been prepared by one of these “chop shops”. That is real lapse in due diligence.

  34. Bobby January 6, 2011 10:16 pm

    @Gene
    Some inventions are clearly relevant to national security (Lockheed Martin, for example), some inventions are clearly not (Smuckers), and some may fall in a gray area (maybe Intel). If the outsourced patent work is in the ‘clearly not’ territory, then no real possibility of a threat to national security exists. The actions of these firms may still be against the law and may cause significant economic harm, but as far as a concern for national security goes, they aren’t really worth mentioning. My interest is further details (if available) on the breakdown of where this outsourcing fits as a concern. If large parts of this are actually coming from firms like Lockheed Martin, then you probably didn’t focus enough on the national security issue, but if it’s coming from firms like Smuckers, then you may have put too much focus on it, and such actions could take away from legitimate concerns presented here.

  35. Stan E. Delo January 6, 2011 10:57 pm

    Not at all Rohan. If a purported *practitioner* is not licensed to practice in your particular US state, they will essentially become moot in a legal sense. I don’t happen to see why direct supervision would have much to do with it. Usually it is much better to just let and help the attorney do their job correctly in the first place, instead of whining about it later. About 5 months ago, the Attorney General’s Office of the great state of Washington filed suit to stop what were perceived to be deceptive practices by an entity that I will of course not name. It should be surfacing in a few months, now that I happen to think of it. If Rob McKenna gets his way, he is going to roast some internet bandits, and investigate a few other things as well. The main complaint was that untrained folks seemed to be trying to proffer legal advice for way too much money.. Sound familiar?

    Stan~

    Rohan writes in small part: I do have a question. Is the “unauthorized practice of law” issue rest solely on “direct supervision” and the lack thereof?

  36. anonymousAgent January 7, 2011 7:40 am

    According to Gene’s strict reading of the law, a non-US citizen residing in the USA (e.g. a citizen of the US or the UK) could not draft a patent for Smuckers for a method of sealing a peanut butter and jelly sandwich.

    This patent could not be drafted by a Toronto-based Canadian licensed attorney either or EVEN by a Toronto-based US citizen US-licensed patent attorney.

    Also, Gene (and every other US patent attorney) would HAVE to leave his laptop at home if he goes to Toronto for the weekend EVEN if Gene is only handling non-defense related cases.

    Also a physics professor dealing with non-defense technology would need an export license to submit a paper for publication to an academic journal outside of the USA.

    C’mon !!!!

    PS I have a LOT of respect for Gene’s excellent blog (kudos on all of the great interviews) but in terms of his reading of export-laws, I think he has gone overboard. I DO think he has a valid point about attorney-client privilege issues. And there is a SERIOUS problem of the PTO not cracking down on practitioners not licensed in the USPTO – I know for a fact that the EBC will even give such ‘practitioners’ a customer number to e-file such applications !!!

    PPS I agree with many of the negative comments about the quality of work coming out of India. If the India-based patent drafter is licensed in the US, then fine. If the US-based attorney KNOWS the application was drafted by a non-US licensed practitioner, and if he does not seriously review the work-product, then this person is NOT his ‘assistant’. In this case, the US-based attorney is aiding and abetting the unlicensed practice of law and should be sanctioned by OED. On the other hand, there are many cases where this happens in the states !!!

  37. MBT January 7, 2011 9:18 am

    Anonymous – A US-based licensed patent attorney/agent or a Canadian-based licensed agent stand to lose a lot if they subvert either their client’s privilege or US laws. On the other hand, if the technology is on the State department list for non-export, then those applications cannot be sent outside the borders, period. Even a fax containing information regarding a protected technology to an offshore collaborator (even in Canada) can result in even criminal sanctions. This aspect of international trade laws are often violated, but I do know of instances where individuals have been prosecuted and companies have lost their government contracting status because of such transger of technology. I seriously doubt that peanut butter art is on the state department list.

  38. Ben January 7, 2011 11:11 am

    I see how outsourcing drafting or prosecution could be problematic in some (if not many) situations. I don’t really see how there is a basis for saying that outsourcing patent searching is illegal or unethical, especially if you are not disclosing proprietary information. In the context of litigation, reexam, or opinion work relating to a published patent application, if you are just hiring an Indian firm to search the world of prior art for the closest stuff to the application, I don’t really see where you could go wrong with law or ethics, and for someone with a budget crunch using a legitimate Indian search firm… there could be value there. (Whether it hurts the American economy as a whole is another story, but arguably by saving money on a patent search, the American company could put its dollars to work elsewhere. Its not like using overpaid American lawyers to do patent searching adds value to the economy 🙂 )

    Ben

  39. Ben January 7, 2011 11:15 am

    You are the Shaun Hannity of patent law

  40. Gene Quinn January 7, 2011 11:32 am

    Ben-

    Thanks for the Hannity compliment. I would prefer to be compared with O’Reilly, but Hannity is extremely successful and influential as well.

    I don’t know why you are unable to understand the illegality and the ethics issue. It seems like you don’t think it should be illegal or unethical. You are entitled to that opinion, but at the end of the day you and all others with that belief need to realize that this is illegal and unethical because the LAW and RULES say it is illegal. It really is that simple.

    -Gene

  41. Rohan January 7, 2011 11:35 am

    What law and what rule says “sending information to India for the purpose of preparing a patent application” is illegal and unethical. If there are no actual conflicts, no national security issues and no export license needed, I do not see the illegality. I do see a very racist blogger.

  42. Ben January 7, 2011 11:44 am

    I agreed with your assertions that there appear to be serious issues with outsourcing patent preparation. So lets leave that alone for now.

    However, nothing in the USTO Notice or other authority you cite supports an assertion that outsourcing a PATENT SEARCH on a PUBLISHED patent application would be illegal or unethical. It might be un-American, from a Hannity/O’Reilly POV, but not illegal or unethical since the application is already in the public domain across the world and all you are doing is asking the Indians to find all the prior art they can so you can a) use the foun prior art to invalidate it, b) use the searched prior art to get an opinion of counsel from your competent American law firm, c) submit the prior art as part of a reexam request with the PTO, d) understand the world of prior art for your own published patent before you start sending letters or litigating.

    So would this scenario be illegal? If so, how do you support that?

    Ben

  43. MBT January 7, 2011 11:46 am

    Rohan, Racism? Yikes. If you don’t agree with an author, call him/her racist – wow – you really learned the fine art of argument there. The very act of a search can give a competitor lots of information. It doesn’t take much for an experienced searcher to put the search strings together to figure out the technology, especially if the identity of the client is known. No racism ( the last I checked, folks in India are classified as caucasian) – just the laws of the US meant to keep US technology safe from those who might want to harm us. I am sure India is fairly vigilent about their technology as well. I suspect there is no outsourcing to Pakistan. The only reason that India is even mentioned here is because that is where the outsourcing is going. I doubt there would be too many folks in favor of outsourcing to Russia, the Ukraine or Balaruse, and those are Causasian countries too.

  44. Rohan January 7, 2011 11:50 am

    Folks in india are classified s Caucasian? You are serious? Last time I checked, I was brown and “randomly selected” for search every time I fly. If I were caucasian, those TSA guys must be really smart to be able to tell the difference between a brown, black haired Indian and a Russian. I look just like Ivan Drago.

  45. IANAE January 7, 2011 11:53 am

    this is illegal and unethical because the LAW and RULES say it is illegal. It really is that simple.

    It’s not that simple. Yes, it’s illegal because the law says it’s illegal. But surely that’s not also the reason it’s unethical, unless you want to have a startlingly brief discussion about the ethics of being 5 mph over the speed limit.

    What’s the real ethical issue with India? If it’s that some bad firms exist there, the same could be said for keeping work here, and sane clients know better than to retain the worst service provider in any market. If it’s a confidentiality issue, applicants should avoid outsourcing out of self-interest (and if it’s not a confidentiality issue, it’s not a national security issue either). If it’s an economic issue, this probably isn’t where you want to take your stand against outsourcing. If you can’t bring back manufacturing on an appreciable scale, it’s pointless to cling to a niche service like patent drafting.

    Incidentally, what’s so very sensitive about the vast majority of these patent applications that we don’t dare outsource their drafting with some assurance of confidentiality, but we happily publish them a year and a half later for all the world to see?

  46. MBT January 7, 2011 11:59 am

    Rohan – my family gets scrutinized every time we fly too – foreign names, brown skin – so spare me the contrived victimhood – you are changing the argument. This has nothing to do with race.

    IANAE – the patents are published after a review by a unit at the PTO which scrutinizes all patents for national secuirty issues. The Departments of Energy and Defense have veto powers over the publication and issuance of patents. All new applications flagged by the “security unit” are run past the appropriate Department for further review.

    Also, the issue of client confidentiality is an issue with any outsourcing, domestic or foreign.

  47. Gene Quinn January 7, 2011 1:30 pm

    Ben-

    Correct. Outsourcing a search after publication of an application would not be a violation. Of course, searches should be done BEFORE drafting an application. So I am correct to say that searches and application prep do violate.

    -Gene

  48. IANAE January 7, 2011 1:30 pm

    the patents are published after a review by a unit at the PTO which scrutinizes all patents for national secuirty issues.

    And we have as much confidence in them as we do in the rest of the PTO staff whose job it is to examine patents for areas of concern, right? Or is it like airport security, where it doesn’t really matter what they’re actually looking for or how much stuff actually slips through as long as there’s some kind of inconvenient rule that purports to be about security to make us feel better?

    Seriously though, the overwhelmingly vast majority of these applications raise no issues of national security at all. And furthermore, these issues don’t even apply so long as we outsource any research that might reasonably raise national security issues, which is somewhat perverse. If you’re looking for the aspects of patent law that keep innovation here or nudge it overseas, it’s the territorially-specific ones.

    What’s unethical about outsourcing the drafting of a patent application when there are clearly no national security issues involved? If my application isn’t about lasers, explosions, explosion-delivery or encryption, why should anybody care?

  49. Gene Quinn January 7, 2011 1:36 pm

    IANAE-

    Did you actually read the article? Please read the article. The ethics issue relates to several things. First, the violation of laws, whether there are true national security concerns doesn’t change the fact that it is illegal. Second, and more directly, the conflict of interests issues CLEARLY create ethical problems. Please read up on attorney ethics rules! You will see that it is unethical to represent in the situation where there is an actual conflict, and you can only represent when there is a potential conflict with full disclosure to the client and client permission. So tactually is that easy, you just choose to ignore the law, rules and factual realities in order to play dumb.

  50. Nilanshu Shekhar January 7, 2011 1:41 pm

    Gentlemen,

    I think, rather than having a healthy discussion, we are digressing from the matter. Let us have an intellectually stimulating discussion rather than trying being personal.

    I appreciate Gene for RE-providing (previously in 2008 on same topic) a platform for a discussion, but unfortunately we are getting judgmental here. There are several government bodies as well as surveillance department to keep a vigil and am sure that people are knowledgeable enough to understand the involved legalities.

    Regards,
    Nilanshu

  51. Blind Dogma January 7, 2011 2:05 pm

    Digression happens because certain individuals are particularly active in selective applications of law. Purists are riled because such selectivity is a perversion in the least, and as Gene points out, potentially a criminal act. I would also add to Ashwin’s elegant post at comment 30, that attorneys have an ethical obligation to report unlawful practice of law – knowing of someone else violating export regulations and doing nothing about is itself an ethical violation. Being a lawyer is a privilege, not a right, and there are responsibilities that should not be made light of, just because the subject matter of an application seems harmless enough.

    Yes, Virginia, this selective application of law is driven by their dogma. Yes, Virginia, you may have another glass of Kool Aid.

  52. Rohan January 7, 2011 2:14 pm

    Blind Dogma, please cite the statute or rule that says:
    “technical data may not be sent to India for the purpose of a patent search even if 1) no export license is needed; 2) no conflicts exist and 3) there is no a national security issue”.
    You do not even need a foreign filing license if the invention was in India.

    There is no such law.

  53. Gene Quinn January 7, 2011 2:44 pm

    Rohan-

    You do realize if the invention was made in India there would be no export and no US jurisdiction, correct? Why are you comparing apples and elephants? Your comments provide no justification for challenging anything I have said. So why try and confuse the issues? What is your agenda?

  54. Rohan January 7, 2011 3:01 pm

    Gene, Why Can’t you cite any rule that says “technical data may not be sent to India for the purpose of a patent search even if 1) no export license is needed; 2) no conflicts exist and 3) there is no a national security issue”.

  55. MBT January 7, 2011 3:08 pm

    I am not putting my license and my client’s interest on the line by outsourcing to anywhere. Take up your arguments with the patent office which issued my license. Their notice on the PTO website is enough for me. It really doesn’t matter if you agree or not. Practitioners are now on notice. Indian companies (or any other outsourcing companies) providing the work are on notice as well.

  56. MBT January 7, 2011 3:10 pm

    Rohan,

    “The BIS has promulgated the Export Administration Regulations (EAR) governing exports of dual-use commodities, software, and technology, including technical data, which are codified at 15 CFR Parts 730–774. Furthermore, if the invention was made in the United States, technical data in the form of a patent application, or in any form, can only be exported for purposes related to the preparation, filing or possible filing and prosecution of a foreign patent application, after compliance with the EAR or following the appropriate USPTO foreign filing license procedure. See 37 CFR 5.11(c). A foreign filing license from the USPTO does not authorize the exporting of subject matter abroad for the preparation of patent applications to be filed in the United States.”

  57. Rohan January 7, 2011 3:15 pm

    MBT, that is correct, a FFL does not authorize it. But if an export license is not needed or is granted, the technical data may be exported.

    Also, the rule (according to the uspto website) actually says, “The license from the Commissioner for Patents referred to in paragraph (a) would also authorize the export of technical data abroad for purposes relating to the preparation, filing or possible filing and prosecution of a foreign patent application *without* separately complying with the regulations contained in 22 CFR parts 121 through 130 (International Traffic in Arms Regulations of the Department of State), 15 CFR parts 730-774”

    It says “without” and not “after”. This means that an FFL stands in place of your export license in this particular instance only.

    MPEP 140 states:
    “In the interests of national security, the United States government imposes restrictions on the export of technical information. These restrictions are administered by the Departments of Commerce, State, and/or Energy depending on the subject matter involved. For the filing of patent applications in foreign countries, the authority for export control has been delegated to the Commissioner for Patents >Note that the export of subject matter abroad for purposes not related to foreign filing of a patent application, such as preparing an application in a foreign country for subsequent filing in the USPTO is not covered by any license from the USPTO. Applicants are directed to the Bureau of Industry of Security at the Department of Commerce for the appropriate clearances”

    What this tells me is that if the CCL does not apply or is satisifed, you may send technical data abroad for purposes not related to foreign filing.

  58. Rohan January 7, 2011 3:24 pm

    MBT, i think you are doing a great job for your client if you choose NOT to outsource to these chop shops. I think they are bad as well. I wish I could snap my fingers and get rid of them, but I want to be clear about what is wrong with them.

    I just do not appreciate some of Gene’s comments about India. I also do not think the issue is that simple. There is a lot to read and understand. I also do not see the rampant criminal enterprises that everyone else seems to see.

  59. Gene Quinn January 7, 2011 4:22 pm

    Rohan-

    Everything I said is accurate, whether you appreciate or don’t appreciate my comments is irrelevant.

    You continually citing MPEP 140 shows you don’t get it. All you are saying is that if there is granted permission there is no violation. That is, of course, true. But what you ignore is that there is not permission, which means there is a violation. So repeatedly saying it is fine if allowed by law is no retort to the situation where the actions clearly violate the law. Also, pretending that the export laws apply only to encryption, atomic energy and the like is simply wrong. So I have to wonder whether you are at all familiar with US export laws.

  60. Rohan January 7, 2011 4:37 pm

    “But what you ignore is that there is not permission, which means there is a violation.”

    Where do you see a general lack of permission? If your technical data esportation is in compliance with the CCL, where is there no permission?

  61. Stan E. Delo January 7, 2011 5:58 pm

    Hello Rohan,

    Perhaps you meant to write FFL as in a Foreign Filing License? As Gene points out, that just means it has been cleared for security issues, but that is not the real issue here. The issue is that sometimes the security issues are avoided BEFORE it even gets to the point where anybody at the USPTO or DOD has had a chance to check it for security issues. What about the personal laptops that every *searcher* probably owns? As someone else has pointed out very eloquently, just knowing that it is occurring and not bringing it to the relevant authorities’ attention in a timely manner is in and of itself a potentionally criminal act.

    Stan~

  62. Rohan January 7, 2011 6:09 pm

    Stan,

    Right, an Foreign filing license has nothing to do with a domestic filing. The EAR governs exportations of technical data. It is not up to the DOD or the USPTO to clear the security issues. It is up to the Commerce Control List. If you are cleared under the CCL, then there is no security issue and the technical data has been cleared for security isssues. In the instances where the CCL prohibits the exportation and you send it to India, then I would agree, that is illegal. I doubt, however, that this is happening at even a small scale.

  63. Stan E. Delo January 7, 2011 6:39 pm

    A Commercial Control List approval probably won’t cut a lot of ice when the FBI shows up to have a look at your records. By then they are not talking any more, but just seizing everything possible, and seeing about getting the US attorney involved sanctioned or disbarred or worse. What if the invention of SONAR and the developments of RADAR had been leaked during the early parts of WWII? We might all be speaking Deutches right about now, It doesn’t matter at all if it is on a small scale right now, but just that it is possible and being allowed to happen.

    Aufwiedersehen,
    Stan~

  64. New Here January 7, 2011 10:05 pm

    @Gene

    After reading here and a little research on my own; I as a developer would never send my work to others for any important reason, not just patents. I would want U.S. Law in my corner, and I say this not because of any lack of trust of anyone, I would just want to know who I am dealing with from the U.S. Law side of it. I already take great care with my work when dealing with people on it, so I take pause when I have found that this outsource is done through solicitations ? OMG !, I would have to take action if I were to receive such a solicitation about my work at all.

    Imho, this is not limited to the patent community, I will keep a close eye on this matter, now that I have a better understanding of it. Thanks.

  65. Gene Quinn January 7, 2011 10:38 pm

    Rohan-

    Frankly, I am growing tired of your ignorance. I’m not sure why you are playing dumb, but I suspect you have a vested interest in pretending that there are no violations of US export regulations.

    Earlier in the thread you said it was easy to make a determination, which is ridiculous. You also said there are only a handful of things that cannot be exported without permission, which is flat wrong.

    For those interested I invite you to take a look at this overview:

    http://www.access.gpo.gov/bis/ear/pdf/738.pdf

    Look particularly at the analysis required on page 5. If anyone things those who send patent searches overseas and patent preparation work are going through this process to determine if a license is required I have a bridge to sell you in Brooklyn. The reality is there are a great number of things that require a license that no one would ever suspect would require a license. We also know that those engaging in the unauthorized practice of law in the patent space by collecting independent inventors via the Internet use India patent searches and prep shops. These actors certainly do not engage in this analysis on a case by case basis like the law requires. So let’s stop pretending there is no problem Rohan. The evidence is against you and you offer nothing other than erroneous factual statements and misstatements of law.

    -Gene

  66. Rohan January 7, 2011 10:46 pm

    The analysis required on page 5 requires at most 10 minutes. I am really sorry if it takes you several hours. Perhaps, private practice was not meant for you.

    Please leave me alone. I do not want to receive your insults and lies anymore.

  67. Gene Quinn January 8, 2011 12:37 pm

    Rohan-

    10 minutes? That proves you have never gone through the proper analysis.

    By the way, I am nit insulting. I am just proving you are wrong, don’t know what you are talking about and it seems you must have an agenda.

    -Gene

  68. Stan E. Delo January 8, 2011 4:28 pm

    Rohan,
    I don’t recall Gene having insulted you, in fact quite the opposite, as you have insulted him and his abilities at least 3 times in this thread. I think he is just trying to make sure misinformation is not allowed to go uncorrected on HIS blog, by others here or himself if neccesary. If you don’t like his dlilgence in avoiding the mis-leading of others that might not know better, the solution is very simple. I think Gene has been Very patient with you so far, as have we all. I can’t help but wonder what would make you post so many comments on this subject unless you have some hidden agenda. We are here to talk about ideas and opinions, and not about what we happen to think of others.

    Cheers,
    Stan~

  69. The Mad Hatter January 9, 2011 1:47 am

    Wow – lots of comments.

    Gene, 100% agreed that ethics is an issue. There are too many firms that where profit is king, and ethics is ignored. If I get the impression that a firm has ethical issues, I avoid them like the plague, and suggest to everyone else that they should do the same as well.

    Wayne

  70. robin January 9, 2011 8:01 pm

    Dear Gene,

    I do not understand why you people are making hue and cry about outsourcing. When I am getting good quality at cheaper rates, why should I not outsource. It is you guys who are forcing to outsource to India, considering the prices that you charge. Why can’t you guys compete with price against India and see that automatically outsourcing gets stopped. There is no point crying on India when the fault remains with you.

  71. Gene Quinn January 9, 2011 9:30 pm

    Robin-

    You are NOT getting good quality out of India, you are IN India. Your ISP places you in India, so you are just trying to promulgate lies by masquerading as someone who uses outsourcing and is happy with what you receive.

    Please go elsewhere to promulgate your lies. Those who intentionally mislead and lie are not welcome on IPWatchdog.com. You are banned.

    -Gene

  72. Stan E. Delo January 9, 2011 9:49 pm

    Gene-
    Probably just Rohan again? The riders of the Riddermark should be able to deal with it, so seemingly no worries as of yet. So what, is he going to SUE you or something for being a racist and a liar? I happen to think Not. Maybe he just needs to quaff a few cool Limeade drinks or something. Hard to say I suppose.

    Stan~

  73. IANAE January 10, 2011 10:11 am

    Gene,

    I have a problem with your implication that the practice is unethical because the law is being violated. Not least because your refreshing brand of positivism precludes any discussion of whether the law is a sensible one.

    So far, we’ve identified issues relating to confidentiality, conflicts of interest, and people moving from firm to firm, which no doubt affect US firms just as much as overseas firms. Nothing specific to India, other than either pointing out that Indians are lacking in these respects or (more in the character of Sean Hannity) questioning whether they are without any sort of factual basis.

    If, as you say, the law can be violated by a simple e-mail about a technology nobody would ever expect to raise national security issues, to a law firm in any other country (which might have perfectly good rules and procedures about conflicts and confidentiality), perhaps it’s time to discuss the actual ethics of the practice and decide whether the time for such a law has come and gone.

  74. MBT January 10, 2011 10:23 am

    IANAE – just whose judgement does the US government have to rely on? It is unethical to break the law – the two are linked. Whether or not we think the law is sensible or not, we are under oath to comply. Please do not confuse lobbying with compliance. And yes, a “simple email” can violate the law.

    As for folks from India or any other country, they are not obligated to follow the legal ethical rules in our perspective jurisdictions, which has nothing to do with whether or not they are honest, capable of doing the work or producing a quality product. I haven’t questioned the integrety, work product or quality of the overseas vendors – just that the US government has made a determination through rulemaking (including public comments) and lawmaking that many of these practices are unlawful. I can disagree (in general I don’t), but I still have to comply.

  75. IANAE January 10, 2011 10:48 am

    just whose judgement does the US government have to rely on?

    Just whose judgment does the US government rely on now? Some glorified examiner who probably has a couple of hours at most to review each application for national security issues? Surely the agent who has a deeper understanding of the technology and probably a fair bit of legal training is better placed to make that decision.

    Besides, if I anticipate national security issues with my inventions, and I want to patent them freely, why wouldn’t I simply put my inventors in another country? That would completely circumvent both the application and the intention of the export laws, while at the same time costing American jobs.

    It is unethical to break the law – the two are linked.

    Now, that’s just silly.

    As for folks from India or any other country, they are not obligated to follow the legal ethical rules in our perspective jurisdictions,

    No, but they’re obligated to follow the rules in their own jurisdictions. What if you outsourced your drafting to England? I’m sure they have no end of rules about conflicts of interest and confidentiality and privilege and such. Why, they practically invented them. Also, it’s not like the US government makes or enforces the rules for the lawyers in each state. It has no assurance that the laws will remain either ethical or complied with. Well, except in the sense that they must be ethical because they have “ethical” in the title.

    just that the US government has made a determination through rulemaking (including public comments) and lawmaking that many of these practices are unlawful. I can disagree (in general I don’t), but I still have to comply.

    Of course you have to comply. That’s what the law means. But it doesn’t make a whole lot of sense to say that this law is a good one because the government made it.

  76. MBT January 10, 2011 10:57 am

    IANAE –
    “Some glorified examiner who probably has a couple of hours at most to review each application for national security issues?” – your implication that examiners aren’t qualified to make the determination is injustified, unfair and wrong. Their constant training and vast experience in their own area of expertise provides for much more reliability than “an experienced agent” who has only the interest of their client, which would produce a huge inconsistency and one which the US government cannot rely upon.

    However, the outsourcing occurs long before the examiner ever sees it which has been discussed above.

    As for ethics, perhaps the ethics rules are not always followed – hence the need for this posting – but at least I have more assurance when a US-based agent or attorney is handling the case than some unknown quanitity in a foreign country where a malpractice suit or other enforcement is weak or non-existent. If my attorney mishandles my case in the US, I can go to the state bar or I can sue or both. I have few remedies against an offshore entity.

  77. IANAE January 10, 2011 11:33 am

    Their constant training and vast experience in their own area of expertise

    That’s all well and good, provided that applicants are thoughtful enough to file applications in the examiner’s area of expertise. Most applications find their way to an examiner who has only a generalized familiarity with a broad technical field related to the invention, which is as much as you can say for the agent who drafted the case. Besides, any patent agent on any blog will tell you that he’s better at applying legal rules to facts than any examiner.

    I’m not saying examiners are unqualified to make the determination, only that they’re no better than agents, and certainly not better enough that it should be impossible to draw an informed conclusion prior to drafting the application.

    I’m also struggling in vain to find this tremendous public interest in government review of technologies that are clearly unrelated to national security, especially when said public interest is so easily subverted to the further detriment of both national security and the national economy.

    If my attorney mishandles my case in the US, I can go to the state bar or I can sue or both. I have few remedies against an offshore entity.

    You have recourse to the local remedies in that country, just as you have recourse to the local remedies in the US. Some countries offer perfectly adequate remedies, I’m sure. But that’s a business decision for companies to make, and a risk they’re surely aware of. Outsourcers are concerned about quality legal services as much as anybody else, and even merely being cost-conscious should turn their minds to the risk of malpractice and the resulting costs. Maybe they’ll find some way to insure or self-insure against the prospect. It’s the same problem when you outsource manufacture to Mexico, and then you realize that it’s much harder to deal with delays and poor build quality because the factory isn’t next door to your management offices and it’s full of Mexicans.

    This law is simply economic protectionism, and a grim reminder that even professional service providers must ultimately be able to compete economically with the rest of the world.

  78. MBT January 10, 2011 11:49 am

    IANAE,

    “I’m also struggling in vain to find this tremendous public interest in government review of technologies that are clearly unrelated to national security, …”

    What items are clearly unrelated to national security? Surely, a lowly ball bearing or diesel engine would not be on the restricted list, right? how about if those same parts went to Iraq, France or Great Britain? To which countries courl they go? All of them? None of them? See: http://www.bis.doc.gov/licensing/exportingbasics.htm and http://www.access.gpo.gov/bis/ear/pdf/indexccl.pdf

    “The Department of Commerce’s Bureau of Industry and Security (BIS) is responsible for implementing and enforcing the Export Administration Regulations (EAR), which regulate the export and reexport of most commercial items. We often refer to the items that BIS regulates as “dual-use” – items that have both commercial and military or proliferation applications – but purely commercial items without an obvious military use are also subject to the EAR.”

    You will find that bearings and diesel engines are on the list. It is virtually impossible for those untrained in current export laws to ascertain whether the technology they are sending off to other countries is on the list or not.

  79. Gene Quinn January 10, 2011 12:29 pm

    IANAE-

    You say: “So far, we’ve identified issues relating to confidentiality, conflicts of interest, and people moving from firm to firm, which no doubt affect US firms just as much as overseas firms.”

    Please give 1 example of a patent attorney who worked for 3 different firms over a 4 to 6 month period. Please also indicate if there were absolutely NO internal controls to segregate work from this nomad attorney so that he/she did not work on matters where a conflict existed.

    Of course you won’t be able to provide an example, so that means you are incorrect. People moving from firm to firm are NOT anywhere near the same level of problem in the US. In the US controls are in place and movements occur on a glacial pace compared to movements in India. This is particularly true over the last several years during this recession. So can we please keep this discussion real and grounded in fact rather than try and pretend?

    You say: “brand of positivism precludes any discussion of whether the law is a sensible one.”

    That is 100% correct. I don’t consider whether the law is a sensible one because that inquiry is irrelevant to the question of whether the law has been or is being broken. It is not a defense to say that the law is not sensible. So I plead guilty to leaving out irrelevant matters in my discussion.

    -Gene

  80. Gene Quinn January 10, 2011 12:32 pm

    “it doesn’t make a whole lot of sense to say that this law is a good one because the government made it.”

    And it makes no sense to say or imply that a law can or should be allowed to be ignored if it is not sensible. The law is the law and it needs to be followed. I for one am sick and tired of having more and more laws stacked on us when there are plenty of laws in place that are simply not enforced. In this context the lack of enforcement has national security implications, ethical implications and has caused jobs to be exported out of the US during the worst recession since the Great Depression. Inexcusable.

  81. The Mad Hatter January 10, 2011 12:53 pm

    Several people have mentioned the word ‘unethical’ in regards to not obeying the law of the United States.

    However that law allows the United States to use torture in prisons, to investigate politicians in other countries, to spy on United Nations staff.

    Possibly it would be more ethical not to obey United States law.

    Wayne

  82. IANAE January 10, 2011 1:37 pm

    You will find that bearings and diesel engines are on the list.

    Uh huh. Toothpaste and bottled water are on the list for airport security. Doesn’t that demonstrate just how divorced the rule is from actual security concerns?

    Not to mention that most US military innovation winds up in the hands of our enemies because we sold it to them before we made enemies of them. Not because they’re reading our patent publications and building their own diesel engines with fancy bearings.

    Of course you won’t be able to provide an example, so that means you are incorrect.

    Oh, obviously. Because I track the employment history of every US agent in real time, and conversely a single example of an Indian doing the same is conclusive proof that the entire country is not to be trusted.

    If you really want to keep the discussion “grounded in fact”, you should get the same facts about India that you insist I get about the US, before jumping to the conclusion that it’s always irresponsible to have anybody outside the US draft a patent application.

    I don’t consider whether the law is a sensible one because that inquiry is irrelevant to the question of whether the law has been or is being broken.

    No, it’s not relevant to whether the law is being broken. It is, however, highly relevant to whether the law is ridiculous in its purpose or effect, and whether the law has outlived its purpose (if ever it served one) and should be changed.

    And it makes no sense to say or imply that a law can or should be allowed to be ignored if it is not sensible.

    It might make some measure of sense to ignore laws that are not sensible, depending on the circumstances. There might be a business reason to infringe a patent, for example. There’s almost always a business reason to not even bother checking if you infringe any patents. It’s completely sensible to exceed the highway speed limit if everyone around you is doing so, and most people think nothing of exceeding the speed limit even when they’re alone on the road. Some people consider it sensible to use marijuana for legitimate medicinal purposes even where it’s illegal to do so.

    Incidentally, this is a pretty good example of where widespread civil disobedience would result in the law being either changed or actively not enforced. Unless that has happened already. I’m sure they’d start enforcing it again in a hurry if something went horribly wrong that compromised national security. For example, if US tanks started getting outmaneuvered by Afghan tanks powered by really good Diesel engines with shiny bearings.

    In this context the lack of enforcement has national security implications, ethical implications and has caused jobs to be exported out of the US during the worst recession since the Great Depression.

    What causes jobs to be exported is not the law, but the economics of patent prosecution. At most, the lack of enforcement fails to prevent the export, but it is certainly not the cause. Besides, diligent enforcement would cause people to export not only the drafting but also the R&D, especially if you couldn’t even develop an innocent ball bearing for an international market without permission.

  83. MBT January 10, 2011 2:22 pm

    IANAE,

    I have 2 comments: the US abides by a rule of law. CItizens can disobey if they want, they just need to be ready to suffer the consequences. People can’t run around smoking pot and sending valuable technology overseas (concurrently?) at their own whim; that is called anarchy. Besides the judgment of a pot-smoking patent practitioner is to be questioned…

    My second comment is related to:

    “Besides, diligent enforcement would cause people to export not only the drafting but also the R&D, especially if you couldn’t even develop an innocent ball bearing for an international market without permission.”

    Shiney new bearings are “dual use” and are vitally necessary for the targeting mechanisms for missiles, for example. The leakage of this technology by someone who thought the law was stupid and wanted to make some money off of it allowed for the proliferation of more accurate arming and targeting of missles by hostile nations.

    The following link provides a list of technology for bearings: http://www.pacamor.com/about/american_heritage.php

    I sure would hate to have a bunch of IP attorneys out there deciding what technology should be allowed to be exported. You are right in one thing – citizens can vote for legislators that make the laws that they like. However, I don’t think you will find many elected officials that will pass a law to allow technology to be sent willy-nilly to offshore entities.

  84. The Mad Hatter January 10, 2011 2:32 pm

    ROFLMAO.

    Did I every tell everyone about the time that I got a call from the Canadian Government asking if the devices that we’d sold could be used to increase the range of a ballistic missile? Yes, folks, people do get these sorts of calls. All the time.

    As it happened the device we’d sold the foreign customer couldn’t increase the range of a ballistic missile, but I can understand the Canadian governments concern.

    Wayne

  85. IANAE January 10, 2011 3:00 pm

    CItizens can disobey if they want, they just need to be ready to suffer the consequences. People can’t run around smoking pot and sending valuable technology overseas (concurrently?) at their own whim; that is called anarchy.

    It turns out that there aren’t any real consequences for outsourcing patent drafting at the moment, which is exactly what Gene is on about. Does that mean US patent drafting can be safely outsourced with your blessing?

    Also, disobeying a single ridiculous law en masse is not called “anarchy”, it’s called “civil disobedience”. It’s especially non-anarchic when the government is complicit by not bothering to enforce said law.

    I don’t think you will find many elected officials that will pass a law to allow technology to be sent willy-nilly to offshore entities.

    All the more reason to find alternative ways to make the laws more relevant to the commercial realities of the day. Progress can’t wait for Congress.

    The good news, I suppose, is that there also aren’t a whole lot of government officials who will enforce the laws against sending technology to offshore entities.

  86. Stan E. Delo January 10, 2011 6:11 pm

    I believe that unethical and illegal behavior have somewhat different meanings. If I illegally jaywalk and get caught, I shouldn’t be surprised if I am fined for doing so, because I knew that it was against the law. Not unethical, but just perhaps dumb and incidentally illegal. If I was driving my Ferrari to Las Vegas at 180 MPH on that very long straight stretch that used to have no speed limits and got pulled over for speeding, I might try to plead ignorance, but here in the US at least, ignorance of the law is not a valid excuse. You will be guilty as charged if they can prove by a preponderence of the evidence that you were actually speeding when you blew the Trooper’s hat off when you drove by him.

    On the other hand, a patent or any other type of attorney here in the US that has sworn that they will uphold and respect the laws in their particular locations here in the US as a condition of being licensed to practice before the USPTO, and whichever particular states they do business in will have a much larger potential for day ruination. Since they are ostensibly trained in the law, they should know better than that, so no mercy there, and oh by the way they have seemingly violated the attorney client privilege by outsourcing the patent search or application. (You did WHAT?) Therefore the clueless attorney or agent could be subject to possibly both criminal charges and ethical violations. Besides perhaps hefty fines and a little or a lot prison time, they might lose the possibility to pursue the career they have invested so much in. On one of the inventors forums I had a chance to chat with an ex-attorney that had recently gotten out of a Federal prison for something that he had purportedly done or neglected to do. I didn’t want to even ask what and why, but I suspect it had a little to do with issues like we have been discussing here lately.

    BTW… I have heard that Fed prisons are the sort of Country Clubs of incarceration here in the US, replete with steaks every other day or so, and otherwise pretty cushy conditions.

    Regards,
    Stan~

  87. patent litigation January 11, 2011 3:01 pm

    I agree that the outsourcing trend has come back to bite us. It seems many US companies that decided to save a few dollars by outsourcing ended up shooting themselves in the foot — by outsourcing, they armed foreign companies with the knowledge and skills to become their own biggest marketplace competitors. In this sense, the decision to outsource too often seems to be penny-wise and pound-foolish. I certainly hope that one day corporate executives will wake up to the scourge of foreign IP theft and realize that some of their outsourcing decisions harm not only American workers, but also themselves.
    http://www.generalpatent.com/media/videos/general-patent-corporation-helps-patent-owners-enforce-their-ip-rights

  88. For Love of God January 14, 2011 1:52 am

    Dear Gene,

    May God help you retain your Job and May your National Security be never under threat (Of course, I did wish the same for Iraq, Afghanistan, Venezuela, Vietnam…but for those poor souls.. retaining their lives became a bigger issue than their jobs).

    Why am I bringing this even up. Well for two things. First, national security was the supposedly the focus of the blog (though methinks holding on to the ‘My Precious’ Job and justifying those fat pay cheques was the main one). Secondly, in this article, you mentioned that “there is no culture of respect of rights (in India)”. There must be something missing when the natural guardians of the moral code and respecter of rights destroyed those countries.

    Also, you and others (like ~ Ashwin) have repeatedly used the words like shoddy , chop shops etc for Indians… .. (as if they are working in dinghy conditions.. as opposed to your prim and propah teak-oak paneled law offices…). What can I say for your ignorance. I can only say that you should visit these places once. And also try out their work (of course the part which is legal.. something like a patent landscape or an invalidation analysis) to understand the quality.

    Also, there are a number of misconceptions floating around. Firstly, like somebody pointed out the patent outsourcing industry is actually very small (a very small part of the 2 billion legal outsourcing industry). Within the smallish industry, the services that are mostly outsourced by tech companies are technology landscapes based on patent filing, Freedom-to-operate studies, litigation support like invalidation analysis, claim chart preparation and so on and so forth which I do not think is illegal. Also, it is being assumed that requisite permissions are not sought by client. On more than one occasion, we have been told that there is delay in sending work because the requisite permissions are sought.

    Finally, Gene has gone on record stating that conflict checks in India are a farce. I don’t think you have your sources right or you are not contacting the right people. I can speak for my firm. We have elaborate conflict check system in place, where not only do we do client-competitor conflict check but also technology conflict check. There are many cases where we have told the client that we are having a conflict problem and referred other companies which might do the job. In other cases, where we believe that there could be potential conflict problems, we have assigned completely different teams (chinese walls).

    I do completely agree with your views in this article about what constitutes legal activities and what are illegal activities which must be put to stop. But the rhetoric throughout has been over-arching the main point. Even, we in India, would not like to encourage such practices. One way is to increase the vigilance/enforcement about the activities and second ofcourse is that law-firms in US need to look at their cost. If you are saying that it cant be done cheaper, then you are not listening to your client. The only reason he is even contemplating risking his invention (and neck) because the costs currently are prohibitive.

    Further, the outsourcing industry is not India specific. Singapore, Philippines, China, Vietnam and now even Pakistan has jumped into the fray. And they are not just competing for US pie but the global pie. Further, there is considerable innovation churning in R&D centers in India. The Indian companies (which are being referred to as ‘outsourcing companies’) are not dependent on work from US alone. There is a healthy domestic market and in addition there are other activities like PCT filing, litigation so even if they accept work from US counterparts, the labeling is inappropriate.

    Finally a word for ~Ashwin. What can I say for you. You disgust me with your phobic comments. Not just in this article but in other articles you have commented about “shoddy work” and “Indian-English”. Guess who has a better record winning your spelling-bee competition. I just wish that you were better in your work and that people would actually come to you instead of you slandering others. For Indians, English is not the native tongue, yet English speaking clients (even the British who came up with the language) come to India for repeat work. They must have seen something which you are missing. And the Client is always right. I wonder how good you are with your second language and could actually get work based on that. Stop acting like a kid who has had his candy stolen.

  89. Gene Quinn January 14, 2011 1:17 pm

    For the love of god

    Is it your position that I have to visit India before I can observe that the legal work I see coming out of the chop shops there is shoddy? Absurd! All I have to do is look at the searches, which everyone in the industry knows are crap. Those who use India know they are bad, but say if it is bad they just pay for another one because it is so cheap. But how do you k ow a search is garbage? Sure, sometimes it is obvious that the searcher didn’t speak much English and the search found things completely unrelated, but it is impossible to catch an OK search that just missed the one or two critical and findable references.

    You, like others from India, choose to miss the point. The size of the violation doesn’t change the fact it is a violation of the law. Clients are NEVER right when they require or even request an attorney participate in breaking the law. At the end of the day there will be patent attorneys left holding the bag. So they need to make careful choices when enabling violations of the law.

    In sum, everything I said is true, I have plenty if clients and it is only a matter of time before outsourcing stops. In the meantime there will be damage caused by those in India ill suited for this type if work. Those are the facts whether you chose to deny them or not.

    Sent from iPhone. Pardon any typos.

  90. The Mad Hatter January 15, 2011 12:13 am

    Heh. And people wonder why I’m such a cynical old bastard.

    Gene, these companies will just write it off as a cost of doing business. Just like the Big Four Record labels, who decided that not paying artists was a great way to save money. The artists had to take them to court to get a settlement, and I have a suspicion (haven’t read all the documents yet) that the settlement is not all that great. I wrote it up as one of my Corporate Copyright Scofflaws series of articles.

    Wayne

  91. For the love of God January 15, 2011 3:42 am

    Dear Gene,

    Thank you for posting my comment. I wasn’t sure it would be posted as I had crossed the line a bit a couple of times.

    Firstly, you speak of violation which somehow is the crux of the matter in question. In my post, I had clearly mentioned that you are assuming requisite permissions are not taken. I have known things to be otherwise. There is far less attention paid to “subject matter that cannot be exported” (encryption technology, nuclear know-how etc. )The number of applications falling under these categories are far less. In fact, these are not my words. A US PTO examiner on Linkedin has commented that very few (~2-3) in his 13 long years career had to precluded. He himself has claimed that there is nothing wrong in getting searches done from abroad. I will leave it for you to decide whether it is a violation or not, as there are different noises coming from your part of the world.

    Secondly, I could have understood if you said the quality of drafting is up-and-down. Searches ?? You got to be kidding me. I really do not know whom you are referring to, when you claimed “everyone knows in the industry that they (searches) are crap”. Well paying for crap is isn’t exactly smart isn’t it unless one is into garbage disposal industry. The searching process is so refined that you’ll be amazed. Not only do we cover almost all the search strategies that a typical PTO examiner would have tried (known from looking at case-histories), but there are a number of technology specific databases that are looked into. And a comment about the people searching – these are people who have had higher degrees in their field of specialization and work as hard as anybody. One of the easiest ways to find out is whether justice is done to the work or not – is whether you get repeat business. And we do. Please discount the intelligence of the clients at your own peril. They would usually give you a test case (at no cost) and check the results with report by a earlier contracted US law firm to see whether you meet standards. Only then the work is assigned.

    If you believe that Outsourcing would stop. So be it. I do not think anybody here is worried. All of us here want to work hard and earn an honest wage within the laws of their jurisdiction. And I am sure there are more than one ways to do it.

    There are many good firms in India providing quality services and of-course many crappy ones (just like in any country). Once you identify the right firm it could work out for both firms like magic. But again since you have made up your mind that this is VIOLATION case and no amount of further discussion can justify the root problem, then I guess there is not much room for discussion.

    Also, Gene, I have had a chance to read some of your other posts like the one where you discuss which of open source or patent regime furthers innovation more – . Kudos for the topic. But the merits/failures of either were hardly discussed. The comments, however, were stimulating as ever. A number of open source proponents tried to tell the problems they were having in doing due-diligence. Some of them were extremely valid. But, unfortunately, instead of turning a sympathetic ear to them and helping them turn around the corner, they were, asked to fall in line or perish (at least that’s impression I got). The debate could have actually veered towards identifying a solution for them. But alas. Attorneys all over the world are not liked much and may be for a reason. We have all got to be mindful of that.

    Thanks. God Bless.

  92. Gene Quinn January 15, 2011 12:16 pm

    For the love of god-

    Quoting a USPTO examiner on the topic of whether the US export laws are being broken is nearly laughable. You are comparing elephants to apples and either you know it and are doing it intentionally or you don’t understand the issues. The USPTO examiner is NOT discussing the US export laws, which are routinely violated in the patent outsourcing world, and secrecy orders. Whether secrecy orders are common or extreme it doesn’t undermine my 100% correct point that those who send technologies abroad in violation of US export laws subvert the intent and requirements of Section 181.

    With respect to searches, you have to remember that the audience here you are talking to KNOWS the truth. Lets assume you do use the same strategies as a PTO examiner. The fact that those in India are not fluent in English compromises the search. I have seen the most ridiculous, crazy results from India, so has everyone that has used or seen an Indian patent search. As far as quality I did not imply it is “up-and-down.” The quality from India is awful. Everyone in the industry in the US knows that to be factually true.

    As far as your critique of my open source and innovation articles, allow me to point out that you are: (1) diverting; and (2) incorrect. Of course, you either know that (doubtful) or you will just disagree because you don’t know any better. Either way, thanks for reading IPWatchdog.com.

    -Gene

  93. For the love of God January 15, 2011 1:05 pm

    Gene

    “Everyone in the Industry in the US” came to you and whispered the truth in your ears?? Fascinating Gene. If the quality was so awful , then I wouldn’t be so worried about ‘Job Loss’ and write an article about it.

    Clearly, you don’t know anything about quality of the searches. Just like the open source article, your ignorance and bull-headedness comes across here too. So I will not even bother to take the discussion further on that. Fluency of English compromising searches ?? Wow Gene. You could be a inventor someday.. did anybody tell you that?

    I didn’t aim to critique your article (If I did it would consume so much space and time and moreover most people commenting about that article had anyway said that you don’t know what you are writing about). I wasn’t diverting. There is a common thread about the articles on this blog – you start by writing things you don’t know much about, then people comment and try to enlighten you, but you being you, think the whole world is wrong (100% incorrect) and do not base their opinions on facts. It really is that simple, ain’t it Gene?

    National Security threat, Job Loss, terrible quality of Indian work, Not fluent in English… If all this can’t fetch you work then don’t know what will.

  94. Gene Quinn January 15, 2011 3:14 pm

    For the love of god-

    You would be surprised who comes and whispers things in my ears! I stand 100% behind the statement that EVERYONE in the industry in the US knows that the work product from India is garbage. I have no doubt heard that from some of your customers, assuming you are for real and you do work with Fortune 500 companies.

    As for knowing something about patent search quality, would you care to enter into a challenge? I have extensive patent searching experience and I would put up my skills and analysis against anyone, any time, anywhere. So this is your put up or shut up moment. I am guessing you will shut up. But why don’t we start with you telling us who you REALLY are, the name of your company and the name of those who have worked for you for more than 90 days. You know who I am, I put everything out into the open, but you hide behind a shell name, a web-based e-mail account and all I or anyone knows is that you operate in India somewhere. So I will take a challenge, but lets start with who you really are so we can investigate your claims of quality.

    As for writing about things I don’t know, we both know that isn’t true, don’t we? That is why you are so upset. You know what I write is on target and you need to discredit me any way possible. Sad really, but at the same time humorous.

    -Gene

  95. Stan E. Delo January 15, 2011 4:15 pm

    For the Love of God,

    I happen to agree with Gene, whether you or anyone else in India happens to like it or not. I think it is just Rohan or Robin on the other end of this particular line, but perhaps I am wrong. Please convince me that I am wrong. I don’t really care about what your religious beliefs happen to be, but perhaps it might be interesting to note that literally millions of people have been killed due to radical religious beliefs. Hitler assasinated/exterminated about 6 million human beings because he/they thought they Might be Jewish. The thesis behind the killings seemed to be that the Jews were guilty of subverting the system for their own profit, which seems pretty insane at best to me. You will generally always be a fool or worse if you attempt to expound on religion or politics, so I try not to go there if it is possible to do so.

    For the love of God, please try to keep things reasonably rational. Have you ever considered looking into Hinduism? They tend to look a little further down the road than other religions, but perhaps I am breaking my own proposed division between religion and rational thought. Why in the world would anyone intentionally MURDER about 2500 people that were completely innocent of anything except being American citizens? Perhaps you might be able to explain that to me from your Indian perspective.

  96. For the love of God January 16, 2011 1:04 am

    Gene

    I m upset? You wish don’t you.

    Using a shell name is not a practice coined by me. It is a standard practice. The idea is to contribute to the debate, and name or firm-alignment should have no bearing on what is being discussed. So nothing wrong there. The fact is I did try to shed some light on the ‘conflict of interest’ point and ‘quality issue’ that had come up, but unfortunately they were sidetracked. Just because of some bad experiences you claimed that all of quality from India is garbage.

    ~Stan, seems you took up just one line from my whole comment and are very upset about it. If Hinduism has had problems, I admit it. I didn’t claim the whole of US had no culture for respect of rights. By the way, I did not involve any religion. I was talking about governmental involvement as they frame the laws. Anyways, my response was to Gene’s way of argument – if few searches have turned out bad, the whole of India has quality issues; If one Indian firm stole his content, then whole of India has no culture of rights. I don’t think I can convince anybody on this forum anything. I apologize, if I crossed the line, but the needless India bashing seems purpose-made to push an agenda.

    ~Gene, with regard to your challenge. I would have taken it seriously if it wasn’t so ridiculous. Give you the names of my employer, all the staff working on the team for 90 days.. and what else… do you want.. .. their blood group, vital statistics? Tell you who I am .. and jeopardize my firm for my opinions. Fat chance. I am not taking the bait, my friend. And who will judge the quality?? You and your friends?? Even if i prove you wrong, what do I get? Even if “you” agree (super doubtful) that the quality was up to the mark, will the industry benefit as a whole? Will the India-bashing stop?? I don’t think so. I don’t care what you think of me. You know what, in two years time, the size of the patent outsourcing industry is going to double, whether you or anybody likes it or not. You want to bet on that? Now that’s a challenge that is worthy of the debate. Not itsy-bitsy search wars.

  97. Gene Quinn January 16, 2011 12:39 pm

    For the love of god-

    I grow weary of you. I called your bluff and you blinked. You don’t want to let us know who you are, but you want to continue to promulgate your position, which we all know is full of lies. You seem to claim some kind of right to remain anonymous. You may claim that right, but I may claim my right to banish you from this forum. The fact is you are not willing to back up your assertions.

    Here is the ultimatum. Either tell us who you are and allow us to somehow verify that your claims of quality, ethical behavior and conflict checks are accurate or you will be banned from this forum.

    You decide.

    -Gene

  98. Blind Dogma January 16, 2011 12:43 pm

    in two years time, the size of the patent outsourcing industry is going to double, whether you or anybody likes it or not.

    I heard this same line two years ago. And two years before that.

    I also noticed the very real announcements by the Office meant to curb the illegal activity. India bashing is unfortunate, but quality and ethical concerns cannot be denied – much less purely legal concerns.

    For the love of God, your prognostication will not come true lacking a change in the law. There is simply too much to lose for US practicioners, too much to lose for US inventors. Even greatly reduced costs must be balanced with the risk and the potential of the end product having zero value. It really is no challenge when reason is introduced.

  99. Gene Quinn January 16, 2011 12:44 pm

    Wayne-

    You are 100% correct. The thought process is peculiar to large businesses. They want to cut costs so they go to the lost cost provider. So A might charge $7,500 and B might charge $2,500, so they go to B. Then what they get from B is so awful that they have to pay twice as much to get the project complete. Still, it is so bad that they have to have their people prop up the product. So at the end of the day there is no savings whatsoever. In some situations with doing and redoing the work they have to actually pay more, which is what many software companies are finding about outsourcing to India. The prices seem great but what you get is so bad that it actually costs MORE money and the project takes 2 or 3 times longer. That is if it ever gets done.

    -Gene

  100. The Mad Hatter January 16, 2011 5:25 pm

    Gene,

    Ethics and business shouldn’t be incompatible. Shouldn’t be. But all too often they seem to be.

    I’ve been told I expect too much of people.

    Wayne

  101. Nar February 19, 2011 10:03 am

    There are two aspects to this article.
    1. Is it illegal to outsource IP work outside the US? The law should take its course if Gene is right

    2. Assumption that work done outside the US is crap. I have seen shoddy work and excellent work coming from all parts of the world. One is better than the other is just hot air.

    I know Gene like to create a flutter… and his articles are very spicy. That is what makes his site so popular and no doubt this is just a marketing gimmick by Gene.

    A fair article would lay the facts clearly and not make unsubstantiated statements like “.. that is no one other than those in the industry that are losing their jobs to the shoddy work provided by outsourcing companies in India.” A popular article on the other hand would play into the emotions of people something Gene is good at doing.

    Wake up Gene… US is not the center of the universe any more. It is a fact, weather you like it or not that US needs countries like India and China to survive.

  102. Gene Quinn February 19, 2011 12:36 pm

    Nar-

    It is not an assumption that legal work done outside the US us crap, as you put it. That is a fact.

    It is you that needs to wake up, not me.

    -Gene

  103. The Mad Hatter February 19, 2011 2:04 pm

    Gene,

    Most work done outside of North America, Europe, and Japan is crap, not just legal work.

    Wayne

  104. Gene Quinn February 19, 2011 3:20 pm

    Wayne-

    I don’t have first hand information on that, but tend to agree with you. I can speak first hand about legal work from India and computer programming from India. The quality us exceptionally low. There are really not many cost savings either. They frequently quote 4 to 5 times the number if hours a job should take, erasing any cost advantages when you factor in the need to redo things because of low quality.

    Cheers.

    -Gene
    Sent from iphone

  105. The Mad Hatter February 19, 2011 9:23 pm

    Gene,

    Just go to Walmart. All the proof you need is there 🙂

    Seriously though, I know of a couple of companies that expected to save huge amounts of money by off-shoring production, and had such high return rates that they lost money. The only way you can make off-shoring work is to have your own staff on site to control production. Apple is one of the few companies who is good at off-shoring.

    That’s why I’m very careful about what I buy. Take guitars. Most of what you’ll see on the shelves of music stores are Chinese, Indonesian, and Pakistani. The quality ranges from terrible to awful. I recently bought a Korean Parker, and it’s pretty good. But only pretty good. American Parkers are killer guitars, but out of my price range.

    The problem comes when you can’t buy local anymore, and Walmart has pretty well killed the American apparel industry.

    Wayne

  106. Stan E. Delo February 20, 2011 12:20 am

    Wayne-

    I heard of an interesting example of *outsourcing* to China that a good friend ot mine had to go through. He had invented a new type of very safe table saw rip fence, and was a 2nd generation Chinese- American, so he figured it wouldn’t be too hard to communicate with the manufacturer. He flew to China from California with a very accurate set of blueprints, and explained the product as carefully as he could, and asked them to send him a few production prototypes, within three months or so.

    When he finally got some samples about 3 months late, they were so sloppy and flat wrong in places that he ended up going to a different company entirely (including another round trip ticket to China and back) This second company Almost got it right, but the extrusion dies were wrong and had to be re-done, and you guessed it, he ended up having to go back for a Third time to get everything done to his satisfaction, nearly a year later than he had hoped….

    Stan~

  107. The Mad Hatter February 20, 2011 7:19 pm

    Stan,

    Sounds typical. I know of companies that went out of business relying on outsourcing. That said, I know some companies that have done well. I also know companies that found someone had built duplicate of their factory, and was using their workforce as a training system.

    Wayne

  108. Stan E. Delo February 20, 2011 8:31 pm

    Wayne-

    Perhaps the best example lately of possible follies as regards *outsourcing* of technology might be best represented by what Boeing has been going through lately during the development of the 787 “Dreamliner” The main spars and wing skins were being molded in Japan to very high standards, while the all important control surfaces and the vertical fin and the rudder structures were very carefully being created in the land of OZ. For those that don’t happen to know, Australia and New Zealand have both been very active in the development of very advanced composites and their implemetation. What really got Boeing though, was that they had major parts coming in from about a dozen countries, which seems pretty wildly optimistic to me for them to expect that a carbon fiber supplier in Turkey might not have some issues now and then? Screaching halt to production or something like that.

    Stan~

  109. The Mad Hatter February 20, 2011 10:26 pm

    Stan,

    Ah, but it was cheap. Evil laugh.

    Wayne

  110. Rondel February 22, 2014 11:16 am

    Gene,

    I am a patent draftsman here in the US. I am concerned about being able to compete with the low prices offered from Indian patent drafting companies. I simply can’t compete with the low price. In an effort to gain some high ground, I’ve been trying to figure out if outsourcing the preparation of patent drawings by themselves is also illegal. The article seems to focus primarily on the application, but doesn’t seem to address the preparation of patent drawings. Are the drawings considered part of the application, or are they considered a separate entity? If they are only a part of the application, would sending only that part qualify as a violation? I haven’t had much luck getting answers, as it seems that most of the attorneys I work with have had some trouble determining how and if this applies to the drawings only. Any insight into the legality of outsourcing drawings is greatly appreciated.

    Rondel

  111. Gene Quinn February 23, 2014 11:41 am

    Rondel-

    The way I read the rules outsourcing patent illustrations and patent searches violates the law unless there is an export license either explicitly granted or automatically in place. Unfortunately, the government seems completely uninterested in enforcing export laws as it applies to technology and patents.

    -Gene