Hazards of exporting dual-use technology

By Essenese Obhan, Obhan & Associates

Duct tape, digital photography, microwaves, night vision equipment, even sanitary napkins will be known to trivia enthusiasts as items that were first military inventions before they were adopted for civilian use. Military inventions are not entitled to, nor may be granted, any lesser or greater protections under intellectual property law. However, many jurisdictions require appropriate procedures to be followed when applying for protection for such inventions. In India, section 35 and related provisions of the Indian Patents Act, 1970, set out secrecy restrictions relating to inventions intended for defence purposes. These provide for restricted publication or communication of information about the inventions, and publication depends upon a determination of whether it would be prejudicial to defence interests.

Hazards of exporting dual-use technology Essenese Obhan
Essenese Obhan
Founding Partner
Obhan & Associates

It is often presumed that, for inventions capable of both civil and military use, that is dual-use, meeting secrecy requirements under intellectual property law is sufficient to allow the use of the inventions. In fact, where dual-use items are intended for export or sale abroad, governments impose additional safeguards to prevent misuse, such as curbing the movement of goods and technology to prevent terrorism, the illegal build-up of weapons of mass destruction, and cyber-surveillance.

Every jurisdiction has in place preventative measures for dual-use items. In India, export control restrictions under its Foreign Trade Policy (FTP) require exporters of such items to obtain special approval from relevant government bodies. The FTP is developed under the Foreign Trade (Development & Regulation) Act, 1992 (FTDR Act), which regulates foreign trade, that is imports and exports. Under the FTP, imports and exports are freely permitted, unless specifically regulated, in other words, subject to a licence, permit or authorisation, or prohibited outright. The regulated category under the FTP’s Indian Trade Classification contains a list of dual-use items, referred to as the special chemicals, organisms, materials, equipment and technologies list (SCOMET).

The SCOMET list assigns items that can have both civil and military applications to nine categories, including nuclear-related technology, chemicals, micro-organisms and toxins and electronics-related items. These items are either prohibited from export, or restricted, thus requiring prior export authorisation, or exempted from export authorisation to certain destinations but with certain post-reporting requirements.

At present, depending on the item, SCOMET authorisations are granted by three government bodies, which are the Directorate General of Foreign Trade, the Department of Defence Production and the Department of Atomic Energy. Exporting SCOMET items without the proper authorisation may result in civil or criminal penalties under various statutes, such as the FTDR Act itself, the Weapons of Mass Destruction and their Delivery Systems (Prohibition of Unlawful Activities) Act, 2005, and the Customs Act, 1962. Penalties range from the cancellation of trade licences to fines and prison terms.

Of particular interest under the SCOMET list, are technical data related to any of the listed categories, particularly since software capabilities are the key to India’s offerings in the global marketplace. Technical data is a wide term and may be interpreted to mean blueprints, tables, engineering designs, manuals stored on hard drives and so on. Related to this, the SCOMET list also includes certain kinds of digital data recorders or hard disks, source codes, algorithms and information security technical data. While there is some regulatory confusion over what exactly constitutes export in such cases, a plain reading suggests that dual-use export controls may impact stakeholders across a wide spectrum. Besides hardware manufacturers, those involved in research and development, especially relating to technical data, could be affected. Conversations with collaborators or foreign clients regarding these items that involve data-sharing, for instance, may invite regulatory scrutiny. Researchers, inventors, and prospective patent applicants would be well-advised to seek appropriate advice on obtaining appropriate permissions before engaging in commercial or other transactions involving dual-use items under this list.

Essenese Obhan is the founding partner at Obhan & Associates

Obhan & Associates

Obhan & Associates


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