Trademark Ruling by US Supreme Court

Trademark Infringement: US Supreme Court Case

US Supreme Court Case – Abitron Austria GmbH v. Hetronic Int’l, Inc., 600 U.S. 412 (U.S. 2023)

The Facts

The case is a trademark dispute between a United States company (Hetronic International, Inc.) and six foreign parties (five companies and one individual (collectively Abitron)).  Hetronic manufactures radio remote controls for construction equipment. It sells and services these products, which employ “a distinctive black-and-yellow color scheme to distinguish them from those of its competitors,” in more than 45 countries.

Abitron originally operated as a licensed distributor for Hetronic, but it later concluded that it held the rights to much of Hetronic’s intellectual property, including the marks on the products at issue in this suit. After reverse engineering Hetronic’s products, Abitron began to sell Hetronic-branded products that incorporated parts sourced from third parties. Abitron mostly sold its products in Europe, but it also made some direct sales into the United States.

Hetronic sued Abitron in the Western District of Oklahoma for the unauthorized “use in commerce [of] any reproduction . . . of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services” when “such use is likely to cause confusion” and Hetronic also invoked §1125(a)(1), which prohibits the “us[e] in commerce” of a protected mark, whether registered or not, that “is likely to cause confusion.”

Abitron argued that Hetronic sought an impermissible extraterritorial application of the Lanham Act. However, the District Court rejected this argument, and a jury later awarded Hetronic approximately $96 million in damages related to Abitron’s global employment of Hetronic’s marks.

This amount thus included damages from Abitron’s direct sales to consumers in the United States, its foreign sales of products for which the foreign buyers designated the United States as the ultimate destination, and its foreign sales of products that did not end up in the United States. The District Court also entered a permanent injunction preventing Abitron from using the marks anywhere in the world.

On appeal, the Tenth Circuit narrowed the injunction to cover only certain countries but otherwise affirmed the judgment. It concluded that the Lanham Act extended to “all of [Abitron’s] foreign infringing conduct” because the “impacts within the United States [were] of a sufficient character and magnitude as would give the United States a reasonably strong interest in the litigation.”

The ruling of the US Supreme Court

On page 415 of Abitron Austria GmbH, Mr. Justice Alito, for the US Supreme Court, wrote, “This case requires us to decide the foreign reach of 15 U.S.C. §1114(1)(a) and §1125(a)(1), two provisions of the Lanham Act prohibit trademark infringement. Applying the presumption against extraterritoriality, we hold that these provisions are not extraterritorial and that they extend only to claims where the claimed infringing use in commerce is domestic.”

How the US Supreme Court reached the Conclusion

“It is a ‘longstanding principle of American law “that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” Abitron Austria GmbH at 417.

“Applying the presumption against extraterritoriality involves “a two-step framework.” Id., at 337, 136 S. Ct. 2090, 195 L. Ed. 2d 476. At step one, we determine whether a provision is extraterritorial, and that determination turns on whether “Congress has affirmatively and unmistakably instructed that” the provision at issue should “apply to foreign conduct.” “If Congress has provided an unmistakable instruction that the provision is extraterritorial, then claims alleging exclusively foreign conduct may proceed, subject to the limits Congress has (or has not) imposed on the statute’s foreign application.” Abitron Austria GmbH, 417, 418.

“If a provision is not extraterritorial, we move to step two, which resolves whether the suit seeks a (permissible) domestic or (impermissible) foreign application of the provision.” Abitron Austria GmbH, 418.

“Step two is designed to apply the presumption against extraterritoriality to claims that involve both domestic and foreign activity, separating the activity that matters from the activity that does not. After all, we have long recognized that the presumption would be meaningless if any domestic conduct could defeat it. Thus, “‘[i]f the conduct relevant to the statute’s focus occurred in the United States, then the case involves a permissible domestic application’ of the statute, ‘even if other conduct occurred abroad.’” And “if the relevant conduct occurred in another country, ‘then the case involves an impermissible extraterritorial application regardless of any other conduct that occurred in US territory.’”

Of course, if all the conduct “‘regarding [the] violations ‘took place outside the United States,” then courts do “not need to determine . . . the statute’s ‘focus’” at all. In that circumstance, there would be no domestic conduct that could be relevant to any focus, so the focus test has no filtering role to play. Abitron Austria GmbH, 419.

Ask Us Anything… about Intellectual Property!

If you or your business are located in the greater Cincinnati, Indianapolis, Lexington, or Louisville standard metropolitan statistical areas and have a topic or question you would like Business Patent Law, PLLC to address in the blog, please send us an email.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.  If you need assistance, please contact Business Patent Law, PLLC.

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USPTO National Stage Application - US Patent Lawyer

US National Stage – Revisited

US National Stage

In the November 6, 2017 post, it was written, “By using this procedure, it is possible for your company to receive the grant of the US Patent before parallel Application filed in other jurisdictions are examined.” Since that date, the USPTO has somewhat altered the time line associated with US National Stage Applications.

Regarding the US National Stage, in the November 6, 2017 post, Business Patent Law, PLLC wrote:

  • Regardless of the nationality of the Patent Applicant, file a Patent Application in the USPTO
  • It best for your company to originally file a Provisional, Nonprovisional or PCT Application in the USPTO — however, if the Provisional, Nonprovisional or PCT Application was first filed in another jurisdiction, a US Nonprovisional Application can be filed in the USPTO until the US statutory deadline has passed
  • If a PCT Application is not the first Application filed, a PCT Application claiming priority to a Provisional or Nonprovisional Application is filed in a PCT Receiving Office (preferably, the USPTO Receiving Office)
  • File a US Nonprovisional Patent Application shortly after the PCT Application was filed, rather than waiting until near the deadline allowed by the PCT
  • By using this procedure, it is possible for your company to receive the grant of the US Patent before parallel Applications filed in other jurisdictions are examined
  • As previously indicated, the grant of a US Patent can expedite the grant of parallel Patents in many foreign jurisdictions

Current Timing for a US National Stage

After the National Stage Application is filed in the USPTO, the length of time before receiving the USPTO “Notice of Acceptance of Application Under 35 U.S.C. 371 and 37 CFR 1.495” is variable. Because of this uncertainty, it is unlikely that the National Stage Application will be granted before parallel applications must be filed in foreign jurisdictions.

If the National Stage Applicant has not received the USPTO “Notice of Acceptance of Application Under 35 U.S.C. 371 and 37 CFT 1.495” after the passage of a reasonable amount of time, contact the USPTO Help Desk to assist with the determination that the US National Stage Application has been properly filed in the USPTO.

Business Patent Law, PLLC’s Observation

Although US law allows the National Stage Applicant to file amended claims with the initial filing of the US National Stage Application, Business Patent Law, PLLC has concluded that it is better to first receive the “Notice of Acceptance of Application Under 35 U.S.C. 371 and 37 CFT 1.495,” and thereafter file the set of amended claims before the first USPTO Office Action.

If you or your company needs assistance with US national, foreign or international Patent Applications, please contact Business Patent Law, PLLC.

Ask Us Anything…about Intellectual Property!

If you or your business are located in the greater Cincinnati, Indianapolis, Lexington, or Louisville standard metropolitan statistical areas and have a topic or question you would like Business Patent Law, PLLC to address in the blog, please send us an email.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.  If you need assistance, please contact Business Patent Law, PLLC.

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European Unitary Patent

What Is the European Unitary Patent?

The European Unity Patent, which came into effect on June 1, 2023, is a way to have a single patent cover multiple countries. As of September 1, 2024, it is expected that eighteen European countries will participate in the Unitary Patent System. In the future it is anticipated twenty-five European countries will participate.

Where Do I File?

A request for a Unitary Patent commences in the European Patent Office.

What are the European Patent Office’s Costs of Filing a European Unitary Patent?

It is estimated that the current cost of filing for a Unitary Patent is approximately 2000 Euros plus VAT, if any.  (This less than the traditional manner of validating a European Patent in selected jurisdictions.)

Which European Countries Currently Participate in the Unitary Patent System?

  • Austria
  • Belgium
  • Bulgaria
  • Denmark
  • Estonia
  • Finland
  • France
  • Germany
  • Italy
  • Latvia
  • Lithuania
  • Luxembourg
  • Malta
  • Netherlands
  • Portugal
  • Romania
  • Slovenia
  • Sweden

Which European Countries will Not Participate in the Unitary Patent System?

Switzerland and the United Kingdom are not members of the European Union and they participate only with the traditional validations of European Patents.

If your company needs assistance with its European Patent Applications or Patents, please contact Business Patent Law, PLLC.

Ask Us Anything…About Intellectual Property!

If you or your business are located in the greater Cincinnati, Indianapolis, Lexington, or Louisville standard metropolitan statistical areas and you have a topic or question you would like Business Patent Law, PLLC to address in the blog, please send us an email.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies. If you need assistance, please contact Business Patent Law, PLLC.

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International Intent to Use Application

Intent to Use Application – Multiclass

What is an Intent to Use Application?

When the goods or services are yet to be used in commerce, clients may opt to file Intent to Use Applications.  The Intent to Use Trademark/Service Mark Application establishes a “constructive” date of first use with the grant of the Registration. Having this date formally established and recorded can benefit the Applicant/Owner of the Mark in situations where there are conflicts between competing Applications for Registration.

Filing a Multi-International Class Intent to Use Application

There are forty-five (45) International Classifications of goods and services. The USPTO requires a filing fee for each International class in which the Applicant intends to use the goods or services. International Classes 1-34 apply to goods and International Classes 35-45 apply to services. Applicants can file a Trademark/Service Mark Application for the same – MARK – in one or more International Classes.

The Scenario: A Case Study

Our company filed a multiclass Application for our – MARK – in International Classes 1 (chemicals), 6 (pharmaceuticals), 10 (medical apparatus), 29 (staple foods) and 44 (medical services).

In due course, the Examiner issued a Notice of Allowance for International Classes 1 (chemicals), 6 (pharmaceuticals), 10 (medical apparatus), 29 (staple foods) and 44 (medical services).

Within six months after the Notice of Allowance, the Applicant must file a Statement of Use for the – MARK – for each International Class before the Registration for that International Class will be granted.

Past The Six-Month Deadline?

For an International Class, if the Applicant has not used the – MARK – in interstate/international commerce before the expiration of the sixth month period, the Applicant can file a Request for an Extension of Time in Which to File a Statement of Use. The Request for an Extension of Time in Which to File a Statement of Use grants the Applicant an additional six-month period to file a Statement of Use for an International Class.

How Many Extensions?

Under Title 15 of the United States Code, an Applicant may file a maximum of five Requests for an Extension of Time in Which to File a Statement of Use.  If a Statement of Use is not filed for an International Class within the maximum statutory time limit, the Application for Registration will go abandoned for that International Class and the Applicant must file a new Application for Registration of the – MARK –.

NOTE: Some International Classes of goods/services require government agency approval before those goods and services can be used in interstate/international commerce.

For the company’s – MARK –, we were able to establish interstate/international use:

  • For International Class 29 (staple foods), the company filed a Statement of Use during the first Request for an Extension of Time to file a Statement of Use and received a Registration.
  • For International Class 44 (medical services), the company filed a Statement of use during the second Request for an Extension of Time and received a Registration.
  • For International Class 1 (chemicals), the company filed a Statement of use during the third Request for an Extension of Time and received a Registration.
  • Due to lack of FDA approval, the company could not establish intrastate/international use of the – MARK – for International Classes 6 (pharmaceuticals) and 10 (medical apparatus) and the Application went abandoned for International Classes 6 and 10.

BPL’s Observations

Although a multiclass Application can be divided after filing, it is usually more cost-efficient for a company to file an Application for each International Class 1 (chemicals), 6 (pharmaceuticals), 10 (medical apparatus), 29 (staple foods) and 44 (medical services), i.e., file five Applications for Registration rather than a single multi-class Application.

The time of filing an Intent to Use Application is critical for most businesses.

Trademark/Service Mark situations can become complicated. If your company needs cost-efficient assistance with filing for Trademarks/Service Marks, please contact BPL.

If you or your business are located in the greater Cincinnati, Indianapolis, Lexington, or Louisville standard metropolitan statistical areas and have a topic or question you would like Business Patent Law, PLLC to address in the blog, please send us an email.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.  If you need assistance, we are here to assist you.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Patent rights transfer around the world - Patent Rights

Patent Assignments

What are Patent Assignments?

What is a patent assignment? In general, a Patent Assignment transfers ownership of the entire patent right, title, and interest owned by one party to a second party.

Patent Assignments are a type of contract between the Assignor (current holder) of Patent rights and the Assignee (new owner) of Patent rights. Recording an executed Assignment in the Patent Offices gives notice of the change in the Patent owner.

Recording ownership of a Patent is similar to recording a deed for real property — like your house. The recording of the deed to your house gives notice of your current ownership and specifies the location of that home in the State. Recording a Patent Assignment gives notice of ownership and the location of your intangible Patent rights.

National and Regional Patent Offices

The European Patent Office is a regional Patent Office and the Japanese and United States Patent Offices are national Patent Offices.

Each national or regional jurisdiction has specific formats and rules associated with recording the ownership of Patent rights. European, Japanese, and United States Patent Offices have required wording and procedures for recording an Assignment in the European, Japanese, or United States Patent Office.

  • For an English language Assignment of Patent Rights, the Japanese Patent Office will accept a Japanese/English bilingual Assignment to record.
  • The European Patent Office will accept an English, French, or German language Assignment. After the European Patent is granted, assignments of the Validations of the European Patent are required in most member states’ Patent Offices where the current owner asserts the European Patent’s rights.
  • The USPTO accepts English language Assignments. (Non-English Assignments must be translated/transliterated into English.)

Patent Applications

Assignments of Patent Applications can also be recorded in Patent Offices. Each jurisdiction will have different rules for recording ownership of Patent Applications. In the United States, when the US Patent Application issues as a US Patent, the ownership of the Patent Application applies to the US Patent until the ownership is assigned to another person/entity.

35 United States Code (U.S.C) 261 Ownership; assignment, reads:

“Subject to the provisions of this title, patents shall have the attributes of personal property. The Patent and Trademark Office shall maintain a register of interests in patents and applications for patents and shall record any document related thereto upon request, and may require a fee therefor.

Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing. The applicant, patentee, or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent, or patents, to the whole or any specified part of the United States.

A certificate of acknowledgment under the hand and official seal of a person authorized to administer oaths within the United States, or, in a foreign country, of a diplomatic or consular officer of the United States or an officer authorized to administer oaths whose authority is proved by a certificate of a diplomatic or consular officer of the United States, or apostille of an official designated by a foreign country which, by treaty or convention, accords like effect to apostilles of designated officials in the United States, shall be prima facie evidence of the execution of an assignment, grant, or conveyance of a patent or application for patent.

An interest that constitutes an assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.”

For Assignments of US Patents and US Patent Applications – because of 35 U.S.C. (U.S.C) 261, Business Patent Law, PLLC advises its clients:

  • In the United States to execute Assignments of Patents or Patent Applications before a notary public.
  • In a jurisdiction other than the United States, to execute the Assignments before the appropriate apostille.

Assignments can become complicated. If your company needs assistance with its Patent Assignments, please contact BPL.

Are you or your business located in the greater Cincinnati, Indianapolis, Lexington, or Louisville areas? Do you have a topic or question you would like us to address in the blog? Please send us an email!

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.  If you need assistance, please contact Business Patent Law, PLLC.

If you want to stay up-to-date with the news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

The Hague

The European Patent

How to Get a European Patent

Can you get a European Patent on a product designed in the United States? Yes. Can Business Patent Law assist you with that patent application? Absolutely! Here are a few things you need to know about overseas patent applications, to better understand the process.

European Patent Applications

  • Applicants can file European Patent Applications (EPA) via the European Patent Convention.
  • Applicants can file EPAs via the Patent Cooperation Treaty.

Locations of the European Patent Office (EPO) for filing EPAs

  • Munich Germany is the principal office of the EPO. Other EPO offices are in Berlin, Brussels, The Hague, and Vienna.
  • Your EPA can be filed at any location of the EPO.

Professionals (Licensed by the EPO) Represent BPL’s Clients before the EPO

  • Business Patent Law (BPL) has foreign associates around the globe ready to represent BPL’s clients before various foreign Patent Offices.
  • In Europe, BPL has associate European Patent Attorneys licensed by the EPO to represent clients before the EPO.
  • BPL works closely with European associates to monitor and assist with the evolution of the EPA toward the grant of the European Patent(s).

Following Examination EPAs are Denied or Granted

  • After examination by the Examination Division of the EPO; if the Examination Division concludes that the EPA is patentable, the post-examination EPA is published.
  • On the date of publication of the post-examination EPA, the European Patent is granted.
  • The European Patent is a “bundle” of individual member states’ National Patents.

Validation of the European Patent (EP) Required in each Designated Member State

  • After the grant of the European Patent, it must be validated in the designated member states.
  • Among other things, validation requires payment of designated member state’s fees and providing translations or transliterations of the Patent if that state does not accept the validation in one of the three official languages of the EPO.

Official Languages of the EPO

  • English
  • French
  • German

Oppositions Against the Granted EP

For a period of nine months subsequent to the grant of the Patent, a third party can institute an Opposition Proceeding against the EP.  In Opposition Proceedings, filed before the Oppositions Division of the EPO, third parties argue against the patentability of the granted EP.

Member Nations of the EPO – 2022

Member Nation                                                                         EPO Member Since

AL Albania 1 May 2010
AT Austria 1 May 1979
BE Belgium 7 October 1977
BG Bulgaria 1 July 2002
CH Switzerland 7 October 1977
CY Cyprus 1 April 1998
CZ Czech Republic 1 July 2002
DE Germany 7 October 1977
DK Denmark 1 January 1990
EE Estonia 1 July 2002
ES Spain 1 October 1986
FI Finland 1 March 1996
FR France 7 October 1977
GB United Kingdom 7 October 1977
GR Greece 1 October 1986
HR Croatia 1 January 2008
HU Hungary 1 January 2003
IE Ireland 1 August 1992
IS Iceland 1 November 2004
IT Italy 1 December 1978
LI Liechtenstein 1 April 1980
LT Lithuania 1 December 2004
LU Luxembourg 7 October 1977
LV Latvia 1 July 2005
MC Monaco 1 December 1991
MK North Macedonia 1 January 2009
MT Malta 1 March 2007
NL Netherlands 7 October 1977
NO Norway 1 January 2008
PL Poland 1 March 2004
PT Portugal 1 January 1992
RO Romania 1 March 2003
RS Serbia 1 October 2010
SE Sweden 1 May 1978
SI Slovenia 1 December 2002
SK Slovakia 1 July 2002
SM San Marino 1 July 2009
TR Turkey 1 November 2000

Need a European Patent?

If your company needs assistance with European or other foreign jurisdictions’ Patent Applications, we can help.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.  If you need assistance, please contact Business Patent Law, PLLC.

Do you have a topic or question you would like Business Patent Law, PLLC to address in the blog? Please send us an email.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

foreign patent protection

How Much Does a Foreign Patent Cost?

Contemplating Patent Protection in Foreign Jurisdictions

During management’s last meeting, it was clear that our international sales have tripled over the last few years. Some of us expressed concern about potential “knock-offs” in other countries. Some of our suppliers are in Asia and the Pacific. We talked to other friendly companies about the costs of foreign Patents. The information provided by our friendly contacts about costs varied. Their common denominator was conjunctive – but the foreign Patent costs!

Should Our Company File Foreign Patent Applications?

It depends. As a general rule, Business Patent Law advises clients:  If a foreign Patent will not make money for the Company or prevent the Company from losing money, there is no business reason for filing one.

Patent rights create a limited monopoly in the foreign jurisdiction granting the Patent.

General Observations on the Costs of Foreign Patents.

  • Applications that can be filed in the English language tend to cost the least
  • Applications that must be transliterated from English into a non-Roman alphabet language tend to be the cost the most
  • Applications that can be translated into a foreign language using the Roman alphabet tend to cost somewhere between an English language Application and a transliterated language foreign Patent Application
  • Usually, the Parent Patent Application is a United States Patent Application prepared by Business Patent Law. When Business Patent Law’s foreign associates opt to utilize most of Business Patent Law’s United States Parent Patent Application, costs to our clients tend to be less than when foreign associates do not use BPL’s Parent Patent Application

Rankings of Costs of Procuring and Maintaining Foreign Patents in Select Foreign Jurisdictions*

  1. European Patent Office                                            14-17 x USPTO costs
  2. Japan Patent Office                                                   2.5-3 x USPTO costs
  3. Korean Intellectual Property Office                       2-3 x USPTO costs
  4. China National Intellectual Property Admin.      2-2.5 x USPTO costs
  5. Mexican Patent Office                                              1.5-2 x USPTO costs
  6. Brazilian National Institute of Industrial Prop.  1-2 x USPTO costs
  7. Australian Patent Office                                           1.0-2 x USPTO costs
  8. Russian Patent Office                                                1.0-1.5 x USPTO costs
  9. Philippines Patent Office                                          1.0-1.5 x USPTO costs
  10. Canadian Intellectual Property Office                   1.0-1.5 x USPTO costs
  11. Indian Patent Office                                                   1.o-1.5 x USPTO costs

* Estimates are based on Business Patent Law’s experience, and due to other countries’ Patent Office and foreign associates activities, fees can be outside of the above estimated ranges. Ranges are based on everything proceeding smoothly in the other Patent Offices.

If we can assist your Company with developing a foreign strategy, please contact Business Patent Law, PLLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.  If you need assistance, please contact Business Patent Law, PLLC.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

foreign nations and US LLCs and tax law

Foreign Owner – US Limited Companies

Can United States Limited Liability Companies be Owned by Foreign Members?

Yes. The United States allows citizens of foreign countries to own a US Limited Liability Company (LLC). A foreign owner can own an equity ownership interest of one hundred percent or a fractional interest.

Is it Advantageous for a Citizen of Foreign Nation to Own a US LLC?

Yes. Ownership of a US Limited Liability Company (LLC) allows a foreign citizen to participate in the largest single economy on earth.

For the purposes of this post, what is referred to as a US LLC is, in fact, a LLC created under the laws of one of the Fifty States or the District of Columbia. Some States allow the formation of a Professional Limited Liability Company (PLLC). A PLLC is a specific type of LLC.

Taxation of US LLCs

Business Patent Law, PLLC does not provide specific tax counsel for its clients. However, we can offer some general principles regarding foreign ownership of US LLCs:

  • Most nations tax the income of their citizens, regardless of jurisdiction where the income was generated.
  • Under US federal tax law, LLCs are considered “pass-through entities” for tax purposes.  This means that profits and losses are passed through to the owners of the LLC.
  • As a general rule, most LLCs are required to pay some type of taxes and/or fees in the State of the LLC’s organization and any other State in which the LLC does business.
  • State law taxes and fees vary from state to state and are usually less than US federal taxes.

Does the US Participate in Tax Treaties with Other Nations?

  • Yes.
  • Before purchasing ownership in a US LLC, a potential foreign owner should seek legal and tax counsel in both the owner’s home nation and the United States.
  • The United States has enacted tax treaties with different nations.
  • Different tax treaties produce different tax consequences for the foreign owner of a US LLC.
  • Among other things, the tax treaties can control what is taxed or is not taxed and payment of taxes in the United States and the foreign owner’s home nation.

Does a Foreign Owner of a US LLC need to register with the IRS?

It depends on the Tax Treaty between the foreign owner’s home Nation and the United States.

As a general rule, a foreign owner owning 25% or more of the US LLC will need to register with the US Internal Revenue Service (IRS). When the foreign owner is required to register with the IRS, the foreign owner must secure a Foreign Taxpayer Identification Number (FTIN). It can take several months for the IRS to issue the FTIN.

Under some tax treaties, an owner of less than a 25% equity interest in the US LLC may not be required to register with the US IRS.

Under some tax treaties, an owner of less than a 25% equity interest in the US LLC may not be taxed on the owner’s profits from the US LLC. However, the foreign owner will likely be taxed on the LLC’s profits in the foreign owner’s home Nation.

If the US LLC should file certain documents related to foreign ownership and does not file the documents with the IRS, the IRS will financially penalize the US LLC.

Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you have questions about equity ownership of a US LLC, please contact Business Patent Law, PLLC and we will discuss possibilities for your business.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

US Patents Held By Foreign Companies

Foreign Companies and US Patents

Can Companies Outside the United States Obtain US Patents?

Yes. The United States has the largest Gross Domestic Product on earth. Foreign Companies that do not have a physical presence in the United States can sell their goods or services in the United States.

For most foreign companies, sales in the US market improve earnings for the foreign businesses.

Advantages of US Patents for Foreign Businesses

  • The United States has a long history of enforcing domestic or foreign Patentees’ rights
  • Granting a US Patent gives the Patentee the right to file a legal action to stop third parties from making, using or selling their patented invention
  • Under Title 35 of the United States Code, a foreign Patentee can sue an alleged infringer in a United States District court and win damages

Options for Foreign Companies

Foreign Companies filing a US Patent Application in the United States Patent and Trademark Office (USPTO) may:

  • Initially file the US Patent Application in the USPTO
  • File a Patent Application in their company’s jurisdictional Patent Office followed by the subsequent filing of the US Patent Application (prior to the expiration of the treaty deadline)
  • Initially file a Patent Cooperation Treaty (PCT) Application in the USPTO followed by the subsequent filing of the US National Stage Application (prior to the expiration of the PCT Treaty deadline)
  • File a Patent Application in your company’s jurisdictional Patent Office followed by the subsequent filing of a PCT Application claiming priority to the initially filed jurisdictional Patent Application
  • Prior to the PCT Treaty deadline, file a US National Stage Application in the USPTO which claims priority to the PCT Application filed by your company that claimed priority to the initial Patent Application filed by your company in its jurisdictional Patent Office

Basic Requirements for Foreign Company Patent Filings

  • English language translation/transliteration of the jurisdictional Patent Application or PCT Application – if the language of the as-filed jurisdictional Patent Application or PCT Application was not English
  • Pay USPTO Processing Fees
  • Submit Specifications and Drawings
  • Claims – usually presented in an “Americanized” preliminary amendment format to increase clarity and minimize USPTO Processing Fees
  • Provide Inventor(s) Declaration(s)

If all this sounds a bit complex, we can help. Business Patent Law, PLLC provides intellectual property and business counsel for businesses and companies.

If you have questions about filing your company’s US Patent Application, please contact Business Patent Law, PLLC and we will discuss possibilities for your business.

If you would like to stay up-to-date with news that impacts your business and intellectual property, sign up for Business Patent Law’s Monthly Mailer™ newsletter.

Patent Maintenance Fees & Annuities

Patent Maintenance Fees and Annuities

In most jurisdictions, utility-type Patents require that periodic patent maintenance fees or annual annuities be paid to maintain the Patent. These payments are usually made to the appropriate governmental body. Most jurisdictions, other than the United States, also require the payment of annual annuities.

United States Patent Maintenance Fees

Title 15 of the United States Code requires the owner of a utility US Patent to pay maintenance fees at three and one-half, seven and one-half and eleven and one-half years subsequent to the issue date of the US Patent.

What Happens if the US Patent’s Maintenance Fee Is Not Paid?

The Patent will expire if the fee is not paid prior to the expiration of the fourth, eighth or twelfth year subsequent to the issue date of the Patent.

An Example Case: Unpaid Patent Maintenance Fees

Due to a Programmer’s Error, Company A did not Generate the Payment for the Seven and One-Half Year Maintenance Fee for Company A’s US Patent for “Gizmo.”

At this point, Company B approaches Company A regarding a license of the “Gizmo” Patent. Is it possible for Company A to enter into a Valid License Agreement with Company B?

Scenario 1

Seven years and nine months subsequent to the issue date of the Gizmo Patent, Company A discovers the maintenance fee was not paid:

  • Pursuant to 37 CFR 1.362(e), by paying the maintenance fee and the surcharge during the “grace period,” Company A and Company B can enter into a license for the Gizmo.

Scenario 2

Nine years subsequent to the issue date of the Gizmo Patent, Company A discovers the maintenance fee was not paid:

  • Pursuant to 37 CFR 1.378, by filing a petition with the Director of Patents stating that the failure to pay the maintenance fee was unintentional, paying the USPTO fee for the petition and the required maintenance fee, the Director may reinstate the expired Gizmo Patent. As a general rule, the Director usually reinstates an expired Patent as long as these above mentioned conditions are met before two years subsequent to the expiration of the Patent.  Subject to any intervening rights, Company A and Company B can enter into a license for the Gizmo.

Scenario 3

Ten and one-half years subsequent to the issue date of the Gizmo Patent, Company A discovers the maintenance fee was not paid:

  • Pursuant to 37 CFR 1.378, by filing a petition with the Director of Patents stating that the failure to pay the maintenance fee was unintentional, paying the USPTO fee for the petition and the required maintenance fee, the Director may reinstate the expired Gizmo Patent. As a general rule, after two years subsequent the expiration of a Patent, the Director exercises more discretion in reinstating any expired Patent. Subject to favorable decision by the Director to reinstate the Patent and any intervening rights, Company A and Company B can enter into a license for the Gizmo.

If you have questions about your company’s Patent maintenance fees or annuities, please contact Business Patent Law, PLLC and we will discuss possibilities for your business and intellectual properties.

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