The 31 CFR § 560.509 safe harbor, explained for general counsel and IP practitioners.
Yes. Engaging Iranian counsel to file, prosecute, register, renew, maintain, and defend a trademark, patent, or industrial design in Iran — and paying that counsel’s reasonable fees — is expressly authorized under US sanctions law. The authority is a self-executing general license, 31 CFR § 560.509 of the Iranian Transactions and Sanctions Regulations (ITSR). No application to the Office of Foreign Assets Control (OFAC) is required, provided the standard screening conditions are met.
This is one of the most misunderstood points in cross-border IP practice. The instinctive reaction from a general counsel — “Iran is comprehensively sanctioned, so we can’t touch it” — is correct as a general rule but wrong for intellectual property. IP protection is a deliberate carve-out, and it has survived every escalation, including the 2018 withdrawal from the JCPOA.
The short version
- It is lawful. Section 560.509 authorizes the full IP lifecycle in Iran — filing, prosecution, registration, renewal, maintenance, and the defense of opposition and infringement proceedings.
- Paying Iranian counsel is expressly covered. The regulation authorizes payment of “reasonable and customary” fees to attorneys and agents in Iran.
- The carve-out is policy, not an accident. IP rights are use-it-or-lose-it. A missed renewal or national-phase deadline extinguishes the right permanently — an outcome at odds with the strong, treaty-backed US interest in worldwide IP protection.
- The real risks are two: the blocked-persons screen and the payment channel — not the IP work itself.
What 31 CFR § 560.509 actually authorizes
The baseline Iran prohibition (§ 560.204) bars the supply of any goods, technology, or services to Iran by US persons. Section 560.509 stands as a standing exception to that rule. It authorizes four categories of IP activity:
- Filing and prosecuting any application for a patent, trademark, copyright, or other form of IP protection.
- Receiving the granted patent, trademark, copyright, or other protection.
- Renewing or maintaining that protection.
- Filing and prosecuting opposition or infringement proceedings, or entering a defense to such proceedings.
Together these cover the entire registration-and-maintenance lifecycle, plus administrative opposition and infringement actions before the IP office — on both the offensive and defensive sides.
The text is unusually broad for an OFAC authorization. One leading sanctions practitioner calls it a “glaring exception” to the rule that OFAC licenses are read narrowly. US courts have read it generously too: in Kalantari v. NITV, Inc., 352 F.3d 1202 (9th Cir. 2003), the court treated the assignment of an Iranian film’s copyright as “ordinarily incident” to the copyrighting activity § 560.509 authorizes.
Paying Iranian counsel is expressly permitted
This is the provision that directly answers the engagement question. Section 560.509(b) authorizes payment of “the reasonable and customary fees and charges currently due to attorneys or representatives within the United States or Iran,” along with fees due to the Iranian IP office.
The single carve-out within the carve-out: the payment may not be made from a blocked account.
So a foreign rights holder can lawfully retain an Iranian IP firm, receive an engagement letter, and pay invoices for the work — as long as the payee is clean and the funds are clean.
The three hard limits
The license is broad, but it has firm edges. Three conditions gate every engagement:
1. No blocked persons. Nothing in § 560.509 authorizes dealings with anyone on OFAC’s Specially Designated Nationals (SDN) List or otherwise blocked under counterterrorism or counterproliferation authorities. The Iranian firm, the payee, co-parties, and any intermediary must be screened against the SDN and consolidated lists. This is the single most likely point of failure — and the easiest to control with a documented screen.
2. No blocked accounts. Authorized payments cannot flow from a blocked account.
3. No end-run by US-owned foreign entities. Section 560.509(c) provides that the license does not authorize a US-owned or -controlled foreign subsidiary to do something that would be prohibited if a US person did it directly.
When does OFAC even reach a foreign company?
This is the question most GCs skip — and it changes the analysis entirely.
OFAC’s primary Iran prohibitions bind US persons: US citizens and permanent residents anywhere in the world, anyone physically in the United States, and US-incorporated entities and their foreign branches. For Iran specifically, the rules also reach foreign entities owned or controlled by a US person.
A genuinely non-US company with no US nexus is generally outside OFAC’s primary jurisdiction altogether — it does not need § 560.509 at all to hire Iranian IP counsel. Its home-jurisdiction rules (for example, the EU or UK regimes) govern instead.
But OFAC’s reach switches on the moment the matter touches the United States. The most common trigger is not a person — it’s a payment. A US-dollar payment that clears through a US correspondent bank pulls the whole transaction into US jurisdiction, even between two non-US parties.
Real-world illustration — the CSE TransTel settlement. In July 2017, CSE Global and its Singapore subsidiary CSE TransTel agreed to pay $12,027,066 to settle 104 apparent ITSR violations. TransTel had originated 104 US-dollar transfers totaling over $11 million, all processed through the United States. OFAC described it as the first time it penalized a non-financial institution outside the US where the sole nexus was settling a transaction with a sanctioned country in US dollars.
The practical lesson: the IP work itself is authorized, but a surrounding dollar payment that touches a blocked party can still cause a US-person violation. Whenever dollars or US persons are in the chain, treat § 560.509 as your compliance anchor.
Why Iranian IP protection is practically unavoidable
Iran’s treaty memberships make local protection a structural necessity, not an optional add-on:
- Paris Convention — in force for Iran since 16 December 1959.
- Madrid Agreement and Protocol — acceded in 2003, so an international trademark registration can designate Iran.
- Patent Cooperation Treaty (PCT) — bound since 4 October 2013, so a PCT application can reach the Iranian national phase.
Because of Madrid and the PCT, a multinational’s international filing can designate or reach Iran automatically — and the national-phase or post-designation steps then require dealings with the Iranian IP office and local counsel. Walking away is not a neutral choice; it forfeits the right.
One caveat for copyright: Iran is not a party to the Berne Convention or the WIPO Copyright Treaty and is not a WTO member. Copyright protection for foreign works is correspondingly weak. The practical value of § 560.509 is overwhelmingly in trademarks, patents, and industrial designs.
What § 560.509 does not clearly cover
Here is where careful practitioners draw the line. The four authorized categories cover securing, maintaining, and defending the right. They do not clearly extend to:
- Full-blown civil litigation and judgment enforcement in the Iranian courts, beyond the enumerated opposition and infringement proceedings.
- Assignments or licensing deals with revenue flows, where money moves beyond ordinary fees.
- Any dealing in which a blocked person may hold an interest.
The conservative reading — and the prudent one — is that anything beyond the four enumerated categories requires separate analysis, and possibly a specific OFAC license. OFAC has not published guidance settling the outer boundary, so reasonable minds differ at the litigation edge.
A practical compliance sequence
A lawful engagement typically follows six steps:
- Confirm the matter fits. It must be genuine IP registration, prosecution, maintenance, or defense within § 560.509(a).
- Screen everyone. Run the Iranian firm, the IP-office payee, and all counterparties against the SDN and consolidated lists. Document the clean result — this is the gating step.
- Confirm no blocked benefit. No blocked person benefits; no blocked account is used.
- Pay only reasonable fees. Stay within “reasonable and customary” charges.
- Route payment carefully. Recognize that US-dollar clearing pulls the transaction into US jurisdiction; structure through compliant, non-US channels where the US nexus can be avoided.
- Keep records. Retain the screens, the engagement terms, and the payment trail.
What should stop the transaction
Halt and obtain specific counsel review if any of these appear: a counterparty match on the SDN list; involvement of the Iranian government beyond the IP office and ordinary fees; any sign that fees exceed “reasonable and customary”; or a new ITSR amendment touching the IP provision.
Frequently asked questions
Is it legal for a US company to register a trademark in Iran?
Yes. 31 CFR § 560.509 authorizes US persons to file, prosecute, register, renew, maintain, and defend trademarks, patents, and other IP in Iran, including paying reasonable fees to Iranian counsel — provided no blocked person or blocked account is involved.
Do I need an OFAC license to hire an Iranian IP attorney?
No specific license is required. Section 560.509 is a self-executing general license. The conditions are the SDN/blocked-persons screen and a clean payment channel.
Does a non-US company need to worry about OFAC at all?
Generally no — unless the matter has a US nexus: a US person, a US-origin service, a US-incorporated or US-owned entity, or a US-dollar payment clearing through a US bank. The dollar-payment trigger is the most common and the most overlooked.
Can I pay the Iranian firm in US dollars?
You can, but a dollar payment clears through the US financial system and brings the transaction into OFAC’s jurisdiction. The payment is authorized under § 560.509, but the screening and clean-account conditions must hold strictly. Many parties prefer non-dollar channels to reduce exposure.
Does the carve-out cover litigation in the Iranian courts?
Not clearly. It covers opposition and infringement proceedings and the defense of them. Affirmative civil litigation and judgment enforcement beyond that should be treated as requiring separate analysis or a specific license.
Did the 2018 JCPOA withdrawal change this?
No. The IP authorization remained in effect, a position reflecting the consensus of OFAC, the State Department, USTR, and the USPTO as reported by INTA. The May 2024 ITSR amendment affected the communications general license, not the IP provision.
Regulation current as of 2026. Section 560.509 was issued at 77 FR 64666 (Oct. 22, 2012) and amended at 77 FR 75848 (Dec. 26, 2012); the operative authorizations remain verbatim as issued. This article is general information for educational purposes and is not legal advice — and in particular is not US sanctions advice. Sanctions facts are case-specific and the program changes quickly. Foreign rights holders should confirm any US-law position with qualified OFAC counsel before acting.
Sadegh Shamshiri
Sadegh leads on legal strategy and represents high-profile clients in IP litigation and enforcement — across trademarks, patents, designs, copyright, and domain names, including complex multi-jurisdictional disputes.