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31 October 2019

Patents and Designs – Application and other fees sought to be reduced for small entities

The Department of Promotion of Industry and Internal Trade in the Indian Ministry of Commerce and Industry has on 18th of October notified the draft Patents (2nd Amendment) Rules, 2019 and the draft Designs (Amendment) Rules, 2019.

These draft Rules propose reduction in the fees payable by the small entities under the Patents Act, and by the small entities and startups under the Designs Act. The fees are in respect of grant of patents or registration of designs, and applications therefor and in respect of other matters relating to the two Acts.

Amendments in the Patents Rules

As per the proposals, the slabs of fees for small entities, as prescribed in the first Schedule to the Patents Rules, 2003 read with Rule 7 thereof, are sought to be merged with that of natural persons and/or startups, both in respect of e-filing and physical filing.

Further, an explanation in sub-rule (3) of Rule 7 will also be substituted, if the proposals are accepted, to provide that where a startup/ small entity, having filed an application for a patent, ceases to be a startup/ small entity due to the lapse of the period during which it is so recognised, or its turnover subsequently crosses the financial threshold limit, no such difference in the scale of fees shall be payable.

Amendments in the Designs Rules

The draft Designs (Amendment) Rules, 2019 propose to amend the first Schedule to the Designs Rules, 2001 to provide only two slabs prescribing the quantum of fees. While first lower slab of fees will be applicable for natural persons, startups and small entities, the higher slab will apply for others alone or with persons specified in the first slab.

It may be noted that as per the draft proposals the startups would also be eligible for the lower fees along with the small entities. The proposed amendments also provide the meaning of ‘startup’ for this purpose.

The fees at present is prescribed under three slabs with fees for small entities being higher than for natural persons.

An explanation, as sought to be provided in the Patents Rules, will also be inserted in Rule 5 of the Designs Rules to provide that where a startup/ small entity, having filed an application for a design, ceases to be a startup/ 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, the difference in the scale of fees shall not be payable