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INDIA: 75% REDUCTION OF FEES FOR DESIGN FILING FOR START-UPS

March 3, 2021

By Vikrant Rana and Dhruv Mathur

Design refers to the features represented by shape, pattern, configuration, ornament or composition of colors or lines of an article or entity, which is judged only by its aesthetics.[1]

On 25th January 2021, the Department for Promotion of Industry and Internal Trade (DPIIT) has published the Designs (Amendment) Rules 2021[2]

AMENDMENTS IN DESIGNS RULES

The DPIIT has amended Design Rules for the filing of Designs by the Startups and included Startup in the definition.

Fees for Two Categories of Applicants:

  1. Natural Person
  2. Other than Natural Persons- small, entity, or others except Small Entity
DESIGN RULES 2001 DESIGN RULES 2021
Rule ea- Small Entity –

(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.

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 of 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 an industry.

 

Rule eb – ‘startup’ is now recognized as an Applicant criteria,

Section 2(eb) of the Design Rules

(a) an entity in India recognized as a startup by the competent authority under Startup India initiative; and

(b) in case of a foreign entity, an entity fulfilling the criteria for turnover and period of incorporation or registration as per Startup India Initiative and submitting declaration to that effect.

 

There was no provision for the startups for design filing and the startup had to use the same definition as provided in the Large Entities. This is exclusively used for Startups.

PROCEDURE FOR DESIGN APPLICATION UNDER DESIGN RULES 2021

  1. Indian Entity-
  2. For an Indian entity to claim the status of a startup, it must be a recognised as a startup by the competent authority under Startup India initiative.
  3. The applicant must possess DPIIT Certificate.
  4. Foreign Entity

However, in case of a foreign entity, an entity fulfilling the criteria for;

  1. Turnover and period must have incorporation or
  2. registration as per Startup India Initiative and
  3. Submitting declaration to that effect,[3]

CHANGE IN CLASSIFICATION OF APPLICANTS

S.No. Basis Previous Law New Law
1.        Classification of Applicant It was classified in two categories – ‘natural person’ and Applicants ‘other than a natural person’. The classification of the Applicants has been changed.  It includes as follows:

a.       Natural Person

b.      Small Entity (MSME)

c.       Startup

2. Categories  The category includes as:

1.      Natural Person

2.      Small Entity

3.      Except Small Entity (Large Entity)

 

 
2.        Fees The Fees for filing the Design Application was as follows:

1.      Natural Person- INR 1000

2.      Small entity- INR 2000

3.      Other than Small Entity- INR 4000

The fees for of the two categories were different and further the fees of the two subcategories under ‘other than a natural person’ were different.

 

The Fees for filing the Design Application is as follows:

1.      Natural Person/Small Entity/Startup- INR 1000

It shows a clear reduction of 75% of the Filing Fee of Designs

2.      Other than Small Entity- INR 4000

 

3.        Forms a.       Form 1 is used Filing the Design applications for the Natural Person/Small Entity/ Other than small entity

b.      Form 24- Claiming status of a small entity

a.      Form 1 is used Filing the Design applications for the Natural Person/Small Entity/ startups/ Other than small entity

b.      Form 24- Claiming status of a small entity or startup.

Conclusion

In India, for a design to be registered and protected, it has to be an original and a new design, implying that there should not exist a previous publication of the same or similar design, in any country prior to the application date of registration.

[1] Section 2(d) of the Design Act, 2000

[2] Vide notification of the Government of India in the Ministry of Commerce and Industry (Department for

Promotion of Industry and Internal Trade) G.S.R. 798(E), dated 18th October, 2019, in the Gazette of India,

Extraordinary

[3] Form 24 under Section 7 of the Design (Amendment) Rules, 2021

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