A Note on the Designs (Amendment) Rules, 2021

Industrial Designs, the Indian counterpart to community designs (EU) or design patents (USA) is governed by the Designs Act (2000) and corresponding Rules. On January 25th, 2021 the Government of India published the notification for the latest amendment of the Designs Rules. The changes incorporated mainly have to do with (a) the recognition of startups, (b) the reduction of registration fees for startups and small entities and (c) the adoption of an international design classification system.

Design

The amended rules recognize and define startups as a separate class of entities [R.2 (eb)] distinct from small entities [R.2 (ea)]. The new rules also stipulate that the difference in registration fees between startups/natural persons/small entities [R.5 (2)(e)] and other types of entities must be made up in case their application is transferred to another type of entity. However, startups or small entities who have outgrown their classification due to increased turnover over time are exempt from this. 

The fee structure [First Schedule] for applications has also been modified. Previously, natural persons, small entities and other entities had separate fee schedules. As of the new amendment, the fees for small entities and startups have been reduced to be on par with the fee structure for natural persons. The schedule also specifies that joint applications made by non-startup/small entity/natural person along with any other type of entity will not get the benefit of reduced fees. 

In the Second Schedule, there have been minor modifications in Form 1 and Form 24 to harmonize the Rules with the newly defined entities. Form 1 now requires the submission of both a Mobile No. and an email ID, presumably in an effort to modernize the application process. Form 24, the declaration of the applicant being a small entity/startup, now provides the newly mandated list of documents to apply for design protection as a small entity/startup.

The scale of costs allowable in proceedings before the Controller [Fourth Schedule] have been decreased to two categories; one applicable to natural persons/startups/small entities and the second applicable to all other entities. The costs for small entities from the 2014 amendment have been reduced to the scale of costs for natural persons, similar to the structure in the First Schedule.

The amendment also changes the classification system from the one outlined in the third schedule to the WIPO-based Locarno classification system for industrial designs [R.10 (1)]. As a consequence, the Third Schedule has been omitted from the Rules. 

The general trend in the amended rules seems to be an attempt to modernize and streamline the current application process. The reduced fees for startups and small entities is likely to reduce the burdens on new and struggling industries and encourage them to register their IP instead of trying to get by without registering any IP and opening themselves up to future lawsuits. The Indian market is currently in a stage of high levels of entrepreneurship combined with low levels of monetary resources, so the ability to easily and cheaply register IP is likely to benefit the economy. 

Author: Varsha Valsaraj, Legal Associate at PA Legal.

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