By Harshad Narendra Karadbhajne and Dhruv Mathur
The Ministry of Commerce and Industry on October 18, 2019 has released the Draft Designs (Amendment) Rules, 2019 (hereinafter referred to as ‘draft amendment rules’) for public comments. The amendment proposes to incorporate the definition of a ‘Startup’, and to revise the fee schedule to encapsulate the fees for Natural Person(s), Startup(s), and Small Entit(y)(ies) in a single group. Moreover, relevant forms have been amended to incorporate the pertinent modifications.
The draft amendment rules were released for the information of the persons likely to be affected thereby and is available for suggestions and comments by the same for a period of thirty days from the date on which the Official Gazette, containing the notification, were made available to the public.
Proposed changes in the Draft Amendment Rules:
- Insertion of the definition of the term ‘Startup’: Referring to the parent rule 2 of the Design (Amendment) Rules, 2001 (hereinafter referred to as said rules), the proposed rule 2 put forwards the definition of ‘startup’ which caters to:-
- the entit(y)(ies) recognized by the competent authority under Startup Indian Initiative;
- the entit(y)(ies), being a foreign entity, fulfilling the criteria for turnover and period of incorporation/ registration as per Startup India Initiative and submitting declaration to that effect.
The law at present only refers to the entit(y)(ies) falling under the small entity criteria, and therefore, the proposed amendment creates a new window for the ‘Startups’ as well.
- Proposed Amendment in the ‘Fees’ clause: Referring to the parent sub-rule (2) of Rule 5 of the said rules, the proposed amendment focuses on the difference on scale of fees which the applicant has to pay with the request for transfer, when an application processed by a natural person and/ or startup and/ or small entity is fully or partly transferred to a person other than a natural person, startup or small entity. The amendment further proposes deletion of the clause (f) of said the parent sub-rule (2) of Rule 5, alongwith the addition of an explanation referring to the situation wherein no difference in fees could be paid when the Startup ceases to be within its own legal status.
- Proposed Amendment related to classification standards: Referring to the clause (1) of parent Rule 10 of the said rules, amendment has been proposed to classify the designs for the purpose of registration, as per the current edition of “International Classification for Industrial Designs (Locarno Classification)” published by World Intellectual Property Organization (WIPO), overriding the parent rule mentioning the classification standard as the Third Schedule.
- Proposed Amendment in the First Schedule: The fees mentioned in the First Schedule has been proposed to be revised, incorporating an encapsulated column of the fees for the Natural Person(s), Startup(s), and Small Entit(y)(ies), thereby replacing the previous.
- Proposed Amendment in the relevant forms: Proposed amendment offers to revise the Form 1 (Application for Registration of Designs) and Form 24 (To be submitted for claiming the status of a Small Entity or Startup) to incorporate provisions for a Startup within.
- Omission of the Classification of Goods: Proposed Amendment has offered to omit the Third Schedule summarizing the Classification of Goods, as present in the parent rules.
- Proposed Amendment in the Fourth Schedule: Proposed amendment offers to revise the Scale of costs allowable in proceeding before the Controller, to include the chart for the Startup as well.
Objections or suggestions, if any, may be addressed to Dr. Ashish Kumar, Senior Development Officer, Department for Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, Government of India, Udyog Bhawan, New Delhi-110011 or by e-mail at krashish@nic.in.