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Patents (2nd Amendment) Rules, 2020 – Indian patent office updates fee schedule
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The Indian Patent Office in its notification dated November 04, 2020 presented Patents (2nd Amendment Rules), 2020. The Amendments have come into force on November 04, 2020.
The amendments bring forth significant changes to the fee schedule. The amended rules quashes the earlier categorization of applicants, for the purposes of fees, into three categories, viz., natural person or startup, small entity and others. According to the new rules, the applicants are now categorized into two categories, viz., natural person or startup or small entity and others.
Since small entity is now included in the same category as natural person and startup, the patent office fee for small entity is reduced and shall be same as the fee for natural person or startup. You may access the new fee schedule here.
Further, sub rule (3) of rule 7 is substituted with the following:
“(3) In case an application processed by a natural person or startup or small entity is fully or partly transferred to a person other than a natural person, startup or small entity, the difference, if any, in the scale of fees between the fees charged from the natural person, startup or small entity and the fees chargeable from the person other than a natural person, startup or small entity in the same matter, shall be paid by the new applicant with the request for transfer.
Explanation— Where a startup or small entity, having filed an application for a patent, ceases to be a startup or small entity due to the lapse of the period during which it is recognized by the competent authority, or its turnover subsequently crosses the financial threshold limit as notified by the competent authority, no such difference in the scale of fees shall be payable.”
The sub rule (3) of rule 7 is amended to include small entity into the same category as natural person and startup. The new rules set forth the following:
- In a scenario where an application is filed by a natural person, a startup or a small entity and is later transferred to a person other than a natural person, a startup or a small entity, the difference in fees due to the change in applicant status shall be paid by the new applicant with the request for transfer.
- In a scenario where an application is filed by a startup or small entity, and during the prosecution of the application, the applicant changes to others, either due to lapse of period which it is recognized by the competent authority, or its turnover subsequently crosses the financial threshold limit as notified by the competent authority, no difference in fee is payable.
Further, the proviso to sub rule (5) of rule 24C is substituted with the following:
“Provided that a request for expedited examination under this rule filed by a startup or small entity shall not be questioned merely on the ground that the startup or small entity, having filed an application for a patent, ceases to be a startup or small entity due to the lapse of the period during which it is recognised by the competent authority, or its turnover subsequently crosses the financial threshold limit as notified by the competent authority.”
According to the above presented proviso, in a scenario where the applicant is a startup or small entity and a request for expedited examination was filed by the applicant and the applicant status changes to others, either due to lapse of period which it is recognized by the competent authority, or its turnover subsequently crosses the financial threshold limit as notified by the competent authority, the request made for the expedited examination is not questionable.
In conclusion, The Patents (2nd Amendment) Rules, primarily tries to reduce the burden of fees incurred by small entity. This move coupled with the expedited examination will encourage small entities to file patent applications for their inventions.
Useful links:
Qualifying as a start-up as per the Indian Patent Rules
How to claim small entity status while filing for patents in Indian Patent Office
We hope this article was a useful read.
Please feel free check our services page to find out if we can cater to your requirements. You can also contact us to explore the option of working together.
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Qualifying as a start-up as per the Indian Patent Rules
Introduction
The Indian Government has announced various initiatives to promote start-ups. One such initiative brings various benefits to start-ups in their patenting initiatives. The benefits primarily correspond to discounts in government fees and expediting of patent examination. The government fees charged for start-ups will be the same as that charged for natural persons (individuals). In this article, we discuss the criteria to be met by an entity, regardless of whether the entity is Indian or not, to qualify as a start-up.
Note that at the time of writing this article the amended rules, under which these benefits are being provided, was released one day before (May 16, 2016). Hence, there could be changes in the way these rules are interpreted going forward.
Criteria to qualify as start-up
Most of the criteria are objective, with one criterion being subjective in nature. To begin with the objective criteria are listed as questions, and if the answer to each of the below listed questions is in the affirmative (yes), then the entity qualifies as a start-up.
- The Startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership?
- Has the entity been registered or incorporated within the last ten years?
- Has the turnover of the entity in any of the financial years since its incorporation been less than INR Hundred crores (USD 13,614,409 at conversion rate of USD 1 = INR 73)?
- Has the entity been formed without splitting up or reconstructing a business, which was already in existence?
- Is the Startup working towards innovation/ improvement of existing products, services and processes and has the potential to generate employment/ create wealth?
The entity has to provide evidence in support of the above listed criteria to be recognized as start-up. The evidence for an Indian entity can include registration or incorporation certificate, and Balance sheet/Income tax acknowledgment for the corresponding years. Whether a declaration by a Chartered accountant regarding the income of the company be accepted is yet be determined. A foreign entity may provide equivalent documents as evidence.
Further, with regards to the subjective criterion, an entity to qualify as start-up should be working towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property. The criterion is considered to be met if the entity aims to develop and commercialise a new product or service or process, or a significantly improved existing product or service or process that will create or add value for customers or workflow. The entity may provide evidence supporting its claim to have met this criterion by providing a declaration mentioning that based on the patent application that is being currently filed they are working towards developing and commercializing a new product or service or process, or a significantly improved existing product or service or process that will create or add value for customers or workflow.
We hope this article helps patent applicants decide which type of entity they fall under. You may also read our article to know about how to claim small entity status.
You may also download the article for your reference.
Please feel free check our patent services page to find out if we can cater to your patent requirements. You can also contact us to explore the option of working together.
Best regards – Team InvnTree
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How to claim small entity status while filing for patents in Indian Patent Office
Qualifying as a Small Entity
Under the Indian Patents Rules, 2003, rule 2(fa) defined “small entity” as:
(i) 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 Enterprises Development Act, 2006 (27 of 2006); and
(ii) in case of an enterprise engaged in providing or rendering of services, an enterprise where the investment in equipment is not more than the limit specified for medium enterprises under clause (b) of sub-section (1) of Section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006).
Explanation 1. — For the purpose of this clause, "enterprise" means an industrial undertaking or a business concern or any other establishment, by whatever name called, engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951) or engaged in providing or rendering of any service or services in such and industry.
Explanation 2. — In calculating the investment in plant and machinery, the cost of pollution control, research and development, industrial safety devices and such other things as may be specified by notification under the Micro, Small and Medium Enterprises Development Act, 2006 (27 of 2006), shall be
excluded.
Explanation 3. —The reference rates of foreign currency of the Reserve Bank of India shall prevail.
In July 2020, the government of India revised the definition of a “Small Enterprise”. An applicant may claim the status of a “Small Entity” if the following criteria can be fulfilled:
- Investment in Plant and Machinery or Equipment does not exceed INR 50 crore (USD 68,64,125 approx)
- Annual Turnover does not exceed INR 250 crore (USD 3,43,20,625 approx)
Documents required as Proof
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. Further, to substantiate a Form 28 filing, the following documents will be required:
-
Indian applicant:
- Evidence of registration under the Micro, Small and Medium Enterprises Act, 2006 (i.e. the MSME or Udyog Aadhar Certificate). You may go through this link to obtain the same.
-
For a non-Indian applicant:
- A self-declaration regarding small entity status
-
Any document as evidence of eligibility
- A self-attested copy of the latest balance sheet in English and a self-attested copy of the latest profit and loss statement in English.
- A certificate/declaration from a Chartered Accountant.
Eligibility for Expedited Examination:
Under the Indian Patents Rules, applicants (Indian or foreign) in the “Small Entity” category may file a request for expedited examination in Form 18-A. However, it must be accompanied by Form-28.
Reduced Government Fee:
Under Patents (2nd Amendment) Rules, 2020 notified on November 04, 2020), the types of Applicants for a patent application have been classified into 2 categories, namely:
- Natural person(s) or Startup(s) or Small entit(y)/(ies)
- Other(s) (i.e. commonly called large entities)
Now, Small Entities enjoy a concession (80%) in the IPO fees.
Conclusion
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
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Best regards – Team InvnTree
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