How to claim small entity status while filing for patents in Indian Patent Office

Introduction

In a recent notification dated 28th day of February, 2014 issued by the Controller General of Patents, Designs and Trademarks, the Department of Industrial policy and promotion (DIPP), Ministry of Commerce and Industry has revised the statutory fee for all patent related filing.

Further, a major change has been dividing the applicants into 3 categories:

1. Natural person

2. Other than Natural person – Small Entity

3. Other than Natural person – Others except small entity

1. Natural person:

An individual applying for a patent is considered as a natural person.

In case the applicant is a Natural person the fee is the lowest of all the three categories. However, the fee has been increased by 60 % of the previously applicable fee, before 28th day of February 2014. The new fee is effective from 28th day of February 2014.

2. Other than natural person:

Non individuals such as companies and legal entities are categorized under other than natural persons. Prior to the notification, dated 28th day of February, 2014, there existed a single category under Other than natural person.

The patent office through this notification has divided the category of Other than natural person into the following categories:

  • Other than Natural person – Small Entity

  • Other than Natural person – Others except small entity

The patent office has fixed a different fee structure for the category of small entity and others except small entity.

The fee for a small entity is between the fee for a Natural person and the fee for Other than natural person (except a small entity). The fee for Other than natural person (except a small entity) is the highest and the fee for Natural person is the lowest.

Further, as per rule 2 of the Patent Rules, 2014 clause (fa) “small entity” means,

  1. In case of an enterprise engaged in the manufacture or production of goods, an enterprise where the investment in plant and machinery does not exceed the limit specified for a medium enterprise under clause (a) of sub-section (1) of section 7 of the Micro, Small and Medium Enterprise Development Act, 2006 (27 of 2006); and

  2.   In case of an enterprise engaged in providing or rendering of services, an enterprise where the investment is not more than the limit specified for a medium enterprise under clause (b) of sub-section (1) of section 7 of the Micro, Small and Medium Enterprise Development Act, 2006.

Qualifying as a small entity

In light of rule 2 of the Patent Rules, 2014, to qualify as a small entity, an applicant who is  engaged in the manufacture or production of goods pertaining to any industry should not have an investment limit over 10 crores ( approx USD 1670000).

Similarly, an applicant who is engaged in providing or rendering services classified under the Micro, small and medium enterprise development Act, 2006, should not have an investment limit over Rupees 5 crores (approx USD 835000).

Further, according to rule 2 of the Patent Rules, 2014, while calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices, and other such things as specified by notification under the Micro, Small and Medium Enterprise Development Act, 2006, shall be excluded.

Procedure for declaration as Small entity

An applicant wishing to be declared as a small entity, has to file a declaration in Form 28, and furnish proof relating to the status of being a small entity. If an applicant wishes to file a new patent application, a form 28 should accompany form1. However, if the applicant has already filed a patent application, and wishes to file any other forms which attracts a fee, form 28 should be filed at least once accompanying the form which the applicant desires to file.

Accepted proof for small entity.

 The accepted proof as specified by the Indian Patent Act is as below:

Applicants having Indian nationality:

Indian applicants need to furnish evidence of registration under the Micro, small and medium enterprise development Act, 2006. In light of this, applicants wishing to claim small entity status need to register under the MSMED Act, 2006.

Further, the patent office may accept other proof such as balance sheet in future. We shall update this, as and when this happens.

Non-Indian Applicants:

Non-Indian applicants need to provide proof relating to their investment capital to claim small entity status. The applicants can provide any document which pertains to this. Ex: Latest filed balance sheet.

Conclusion

In light of this notification, the applicants in the other than natural persons have been divided into two further categories of small entity and Other than natural person (except a small entity), wherein an applicant of small entity status attracts a lower fee, which is half the fee for an applicant of status Other than natural person (except a small entity). In light of this, applicants wishing to claim small entity status need to furnish certain proof and documentation to claim this status. This article tries to help such applicants to claim small entity status.

We hope you found this article useful. You may be interested in reading our articles:

How much does it cost to get a patent in India?     
Filing a national phase patent application in India after filing a PCT application 

Feel free to write to us at contact@invntree.com

Best regards – Team InvnTree

This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License

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